Cost Segregation

Increase Your Cash Flow With Cost Segregation

Generate significant tax savings by managing your facility’s depreciation

Cost segregation is the process of identifying shorter-life assets within your total real estate portfolio and reclassifying them to qualify for five-, seven- or fifteen-year depreciable lives. Generally, these items include certain electrical and mechanical systems, decorative features, specialty fixtures, land improvements and more. By depreciating these items on the correct schedule, you can reduce your current taxes considerably while accelerating cash flow.

Left unsegregated, these assets are typically depreciate over a 39-year period, decades longer than they should be. And since these costs are usually associated with new construction or acquisition, you’re often paying for that mistake from the very moment you come to own the property.

Fortunately, you can do more than realize tax savings moving forward – you can even recoup prior years’ tax savings, too, even if you’ve only now become aware of them. That’s because the IRS provides a simplified method for real estate owners to claim depreciation deductions that had gone unclaimed on earlier tax returns.

The Benefits of Partnering With EDSS

EDSS brings unsurpassed expertise to the analysis of your business’s physical structure. Our on-staff professionals and world-class business partners have the experience and insight you need to help you make the most – and save the most – from your real estate.

When you call on us to perform a cost segregation analysis, we first perform a thorough, engineering-based study and then follow that up with a detailed review by accountants who understand the intricacies of commercial real estate. It’s a methodical process that’s specifically designed to maximize cash flow while meeting all IRS requirements.

Cash Flow Savings that Substantially Exceed the Cost of the Study

How much savings can you realistically expect to realize through cost segregation? Individual locations can vary so much in terms of size, materials and more that generalizing is difficult. But we find that clients often see their cost segregation study investment exceeded by TEN TIMES OR MORE. Better still, many of our clients have realized sales and use tax benefits, property tax relief, state and local tax credits and transaction assistance, to name a few additional benefits.

 

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