Have you built, acquired or renovated a facility in the past few years and want to maximize the tax benefit of these capital costs? A cost segregation study conducted on your buildings, plants and the components therein may help you realize tax savings today and have a positive impact on your cash flow.
Cost segregation is a formal engineering process in which a portion of building costs and land improvements traditionally depreciated over 27.5 to 39 years are reallocated to asset classes with shorter depreciable lives (5, 7 or 15-year lives). The reduction in depreciable lives results in an acceleration of depreciation deductions, a reduction in tax liability for the current and future years, and an increase in cash flow.
A cost segregation study can be performed immediately after a new building is constructed or an existing building is acquired. It can also be beneficial when an existing building has major capital improvements (due to renovation or build-out) or even for a building acquired or renovated less than 15 years ago.