A cost segregation study won’t benefit you if…
• You are not profitable and pay no income taxes
• You have paid no income taxes in the last 7 years
• Your business is a non-profit organization (NPO)
• Your building leases 50.1% of it’s space to a NPO
• You plan on selling within the first two to three years of ownership
• Your building cost under $100,000 to construct or acquire
• You lease your space and build-out is under $80,000
• You acquired your property in a Sec. 1060 transaction
• You are subject to large depreciation recapture from like-kind exchange
• You qualify and take DPAD benefits on your property
Cost segregation is a legitimate tax planning strategy that can result in increased current cash flow. Cost segregation will generate significant net-present-value savings for owners of depreciable real property. These benefits can often be expanded if the taxpayer can also take advantage of the IRC Sec. 481(a) catch-up adjustment. A cost segregation tax strategy, however, is not without potential positive and negative tax side effects based on specific circumstances. As a part of value-added services provided to clients, a cost segregation firm should share the potential future benefits and drawbacks when advising about the suitability of implementing any cost segregation strategy.
Cost segregation benefits are available to you if you do not meet the above criteria, congratulations! So, for you…
Cost segregation delivers results every time it is applied.
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