Cost Segregation Study Overview
Engineering based cost segregation studies permit commercial real estate owners to reclassify real property for depreciation purposes and reclassify it as more rapidly depreciating personal property. This reclassification results in significant cash flow benefits in both present and future years through considerably shorter depreciable tax life and accelerated depreciation methods.
In 2004 the IRS released the Audit & Technique Guideline, making clear the expected process of performing a successful Cost Segregation Study. This opened the doors for many small and midsize companies to begin taking advantage of what was previously only pursued by larger companies.
- Purchased a commercial building or facility
- Constructed a new commercial building
- Renovated, remodeled, restored or expanded an existing facility
- Paid for facility leasehold improvements
An average Cost Segregation Study offers approximately $150,000 in additional depreciation per $1 million dollars in purchase or construction cost over the normal 39 year straight line method.
“Cost Segregation Studies are a lucrative tax strategy that should be considered in almost every real estate purchase.” -U.S. Treasury
“…Cost Segregation Studies should be performed by qualified individuals or firms such as those employing personnel competent in design, construction, auditing, and estimating procedures relating to building construction.” -U.S. Internal Revenue Service
GMG utilizes a team of highly qualified professionals adhere to the IRS recognized Detailed Engineering Approach to perform all Cost Segregation Studies. This methodology maximizes benefits and assures that IRS guidelines are followed.
The initial consultation is a simple and quick process. To schedule your consultation,
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We understand the complexity of these programs, and offer free consultation to assist you in deciding if a study is right for your business. Contact us today for a no hassle, no commitment, no charge review.