Cost segregation is a tax saving strategy that allows companies or individuals to take advantage of depreciation of property that has been constructed, improved, expanded or remodeled since 1987. It’s a way to improve cash flow by deferring federal and state income taxes through the acceleration of deductions taken for yearly depreciation.
A Tampa CPA from Reliance Consulting, LLC, can explain in detail all the potential benefits of a cost segregation study. In general, rather than waiting the standard 27-39 years for real property depreciation to take full effect, a cost segregation study allows a building owner to depreciate construction-related costs over a far shorter period of time – typically five, seven or 15 years. In addition, a cost segregation study can:
- Maximize current tax savings, freeing up cash for immediate investment
- Create an audit trail through proper documentation
- Allow for immediate recovery of retroactive savings in the year that the cost segregation study is conducted, as opposed to waiting several years for return on depreciation
- Uncover other tax liabilities and savings opportunities
In order to get the most out of a cost segregation study, it should be conducted by a person or entity with thorough knowledge of engineering, construction and tax laws, as well as a working familiarity with court cases and ruling about the definition of personal property. Contact Reliance Consulting today to learn more about how a cost segregation study may benefit you or your company.