Cost Segregation Study

• Income taxes:  reduces or temporarily eliminates federal income tax burden
• Real estate taxes:  personal property taxes are assessed at a lower rate than real property taxes, often by as much as 25%
• Use taxes:  reduced by as much as 25%
• Property insurance:  personal property is assessed at a lower cost “per thousand” than real property, typically between 10% & 20%
• Lender financing:  due to the increased cash flow many lenders will negotiate on their loan criteria by reducing the interest rate up to 1% or reducing the required down payment amount
• The combination of the above benefits can be quite substantial based on your specific criteria…let’s look at some specific examples of how cost segregation saved substantial sums of income taxes for these clients:

Example #1: Dental Office

$310,000 tax-basis, reclassified 52.2% of property to 5- & 15-year recovery periods, accelerated depreciation by $112,793, tax credit of $39,477

Example #2:  Multi-family

$9,125,000 tax-basis, reclassified 27% of property to 5- & 15-year recovery periods, accelerated depreciation by $1,250,751, tax credit of $525,316

Example #3:  Retail Center

$10.2 million tax-basis, reclassified 25% of property to 5- & 15-year recovery periods, accelerated depreciation by $1,523,575, tax credit of $594,198

Example #4:  Office Building

$61 million tax-basis, reclassified 30.5% of property to 5- & 15-year recovery periods, accelerated depreciation by $11,109,549, tax credit of $4,546,025