Cost Segregation

Boost your bottom line with this smart tax strategy.

Our clients realize an average 54:1 ROI

Cost segregation studies separate real property into various depreciable categories, and allow taxpayers to depreciate property over much shorter periods of time than the typical 39-year (or 27.5-year) period. By taking deductions sooner, you lower your current-year tax liability and free up more capital.

The results of a cost segregation study can help your bottom line with:

  • Substantial accelerated tax deductions
  • Increased cash flow
  • Special depreciation allowances (i.e., Section 179 or bonus depreciation)

Our work is performed in accordance with current tax authority, including the Internal Revenue Code, court decisions, revenue procedures, revenue rulings and Treasury regulations. Our analysis applies the standards in the “Cost Segregation Audit Techniques Guide” used by the IRS.

Our Certified Cost Segregation Professionals have the highest level of accreditation in the industry, and we’re one of only 16 firms in the country to employ such experts.

Cost Segregation Page

Tax Reform = Increased Benefits

Recent tax reform greatly increased the benefit of cost segregation. Under the new law, additional depreciation is available for property components that are assigned a depreciation life of 20 years or less. This “bonus depreciation” is now available on both new construction and acquired properties at a rate of 100% (up from a rate of 50% under prior law). This change makes cost segregation even more impactful.

For example, if you buy a commercial property for $1,000,000 (excluding land), the impact of cost segregation is illustrated at the right.*

First year depreciation is over 25 times greater when applying cost segregation!

These same benefits can apply to remodels, expansions, build-outs, residential rental property, etc. Changes to 179 expensing rules also favor taxpayers under the new law — roofs, HVAC systems, fire alarm systems and security systems may be eligible for 100% expensing in the first year!

The bottom line is, our clients who invest in a cost segregation study achieve an average ROI of 54 to 1, and tax reform will only make these benefits greater.

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Cost Segregation Advisors

Clark Schaefer Hackett’s tax team is proud to offer strategic advisement that appropriately reduces tax burden. At CSH, we don’t just serve clients; we create remarkable client relationships.

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