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Cost Segregation allows companies to increase cash flow by accelerating
depreciation deductions and deferring federal and state income taxes.
We've covered this issue in our newsletter, Profit
Ability . Because of the potential tax savings it can provide business
owners, we are stressing the importance of a Cost Segregation study for
all of our business clients that have constructed, purchased, improved,
remodeled or expanded any kind of real estate property within the last
one to seven years. For candidates of Cost Segregation, some substantial
deduction opportunities exist that can have a significant bottom-line
impact.
Details
"...we are stressing
the importance of a Cost Segregation study for
all of our business clients that have constructed,
purchased, improved, remodeled or expanded any
kind of real estate property within the last one
to seven years."
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Even though the discipline of Cost Segregation has been around for many years, very few business owners are aware of this area of the tax law. At Talley & Company, we can guide you through the Cost Segregation process from start to finish. The process involves some very specific engineering, architectural and tax expertise, so we work with professionals from each discipline to identify, segregate and reclassify project-related costs. The result is that many costs that are currently being classified as residential real property (27.5 years) or nonresidential real property (39 years) can be reclassified to shorter depreciation terms. In most cases, a Cost Segregation study can help a business increase cash flow by accelerating income tax deductions on reclassified assets.
Potential Savings
An obvious question is, "How much can my company
save by engaging in a Cost Segregation study?"
First, we will say that every project is different.
But as a general rule, tax savings can be
as much as 15-30% of each dollar of construction or
acquisition cost identified.
Cost Segregation services are not for every business, but those which
are candidates usually see significant tax savings come tax time. Please
note that it is crucial to consult a tax planning professional at Talley
& Company before engaging in this area of the tax code. If you would
like to contact us regarding a Cost Segregation study for your business,
you can email us at info@talleynco.com
or telephone our offices at 714.867.2200.
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