Skip to main content

Cost Segregation

Construction workers in shadow

MAXIMIZE DEPRECIATION DEDUCTION & IMPROVE CASH FLOW

The tax professionals at Altus Group possess deep tax and financial expertise. Every day, we put this expertise to work for our clients to deliver exceptional results – exceeding expectations and establishing trusting and longstanding relationships. Assisting our clients in minimizing tax risk, and ensuring that their tax liabilities are fair and equitable, is a primary focus of our tax team and our cost segregation service is one that can help.

Regardless of size, taxpayers owning or occupying almost any type of real estate holding can benefit from a cost segregation study. Altus Groups experts can perform a cost segregation study to help your organization maximize depreciation deductions and improve cash flow.

WHAT IS A COST SEGREGATION STUDY AND WHY SHOULD I CONSIDER ONE?

An Altus Group cost segregation study can enable your company to minimize its federal, state, and local taxes. The study is an in-depth analysis of the costs incurred to acquire, build, renovate, or expand a real estate holding that is currently depreciated over 39 years (non-residential real property) or 27.5 years (residential real property). A cost segregation study identifies those costs that should instead be classified as personal property (generally depreciable over 5 to 7 years) or land improvements (depreciable over 15 years). Assuming an effective tax rate of 40%, the net present value of the increased cash flow from a cost segregation study using a discount rate of 6% can exceed $200,000 for every $1,000,000 of property reclassified from 39-year real property to certain personal property categories. In addition, a properly coordinated cost segregation study can be helpful in minimizing non-income taxes, such as:

  • Property Taxes
  • Sales & Use Taxes
  • Transfer Taxes

Owners and lessors of most types of property can reap significant tax savings from a cost segregation study. The acceleration of depreciation deductions for income tax purposes, together with the non-income tax savings that a study produces, can increase your cash flow and improve your bottom line.