Cost segregation is an IRS approved method of accelerating depreciation on your industrial real estate property by re-classifying components from real property to personal property. This process allows the assets to be depreciated on a 5-, 7-, or 15-year schedule instead of the traditional 39-year depreciation schedule of real property. With the passing of the One Big Beautiful Bill, 100% bonus depreciation is back and owners of industrial properties can benefit significantly from this. We typically see an income tax savings of $30,000 – $70,000 per million in building basis.
If you have a building with a basis over $200,000, we should at least have a conversation. We can run a no-cost, no obligation estimate for you that you can then discuss with your tax adviser as to whether or not it makes sense to go forward with such a study. As I talk with building owners across the country, my experience is that about 7 out of 10 have not heard of a cost segregation study and how it can help them increase cash flow and save money on taxes. This can also boost investment returns by maximizing depreciation and minimizing the tax burden.
We will work with your CPA or tax advisor to make sure this gets implemented property on your taxes. We are happy to answer any questions you or your tax counsel might have for us. We have conducted more than 55,000 of these studies successfully all across the U.S. and on nearly every building type imaginable. Our studies have worked every single time.
What’s the process? We send you an estimate after knowing a little bit about your building. We don’t need to ever see your tax returns. That’s between your and your tax advisor. If you think after reviewing the estimate that it’s a good return on your money, then we sign a contract to do the work. 50% will be due up front with the remainder upon completion. We send someone out to do a site survey….take notes and pictures of all aspects of the building’s interior, mechanicals, exterior, landscaping, lighting, parking lot, signage etc. If you happen to have a survey, appraisal or AIA form for remodeling we’ll need that. If you have owned the building for more than one tax year, we’ll need the depreciation schedule. If you purchased it within the past year and haven’t filed taxes since owning it, then we’ll need to see your closing statement. We’ll also need a value for the land and that needs to be deducted from any amount we will analyze since land cannot be depreciated. We get all of this to our team and they get to work. It typically takes 3-4 weeks to get the study completed once we have all the documents. Please plan accordingly so that we don’t miss any deadlines. We watch this very closely so as not to miss those dates.
What kinds of buildings might be applicable for such a study? All kinds…. retail, industrial, commercial, office, strip center, grocery store, hotel, storage, warehouse, residential investment, duplex, four plex, apartments, Airbnb, fast food, mixed use etc.
I’d be happy to talk with you further. Please feel free to reach out to me if you have questions and would like to discuss.
