Accelerate depreciation deductions and increase cash flow with a cost segregation study.
Your real estate assets may have hidden value. Your building is a key asset, and with any major investment, you want to get the best return. But do you know how you can:
Maximize your return?
Reduce your taxes and increase your cash flow?
Accelerate the depreciation deductions of your building's assets?
A cost segregation study can accomplish all three of these goals. The study examines the assets of your building and identifies those that can be depreciated over different and faster recovery periods than if they remained classified as residential real property (27.5 years) or nonresidential real property (39 years). For example, some assets can be categorized as land improvements (15 years) or items whose sole purpose is not for the operation and maintenance of the building but for equipment use (5-7 years).
When done correctly, cost segregation studies accelerate your depreciation deductions, resulting in a lower tax bill and an increase in current cash flow.
Our Cost Segregation Study Process
When we perform a cost segregation study, you can expect:
A site visit to determine if the building plans are accurate, identify those items that can be moved into the 5-year and 15-year “buckets,” and document the property through pictures and narrative video in case the study is ever looked at by a third party.
Construction specialists who use the building plans to determine measurements, electrical power loads and other counts of the building components and classify them according to the recovery periods referenced above.
Pricing of the building components using “an accepted third-party pricing source” that is consistently applied to all of the building components.
A thorough report that explains the process and, more importantly, the tax justification for those items moved to a 5-year or 15-year recovery period.
A quality study will use specialty engineering software that can download the building plans, perform all of the engineering calculations and determine the appropriate pricing for the calculations by linking with a third-party pricing service. This methodology results in greater accuracy, and, more importantly, a document that supports engineering and pricing processes in one location.
The Eide Bailly Cost Segregation Team
The IRS requires that cost segregation studies be performed by firms that demonstrate engineering, construction, tax law and accounting expertise. Eide Bailly’s cost segregation professionals are nationally recognized industry specialists that meet these requirements. We will complete a thorough site visit, review the building plans and analyze cost details for the building to determine which assets can be reclassified to shorter depreciable recovery periods. We'll work closely with you throughout the process to ensure you are getting the greatest benefit. Our cost segregation studies include complete estimates, technical report, audit support (if needed), invoice review, computed benefit and/or general guidance.
In our Real Estate and Development business, our relationship with Eide Bailly has been invaluable in the set up of our new PPMs. Their staff members have brought to our attention exciting cost segregation items, which have helped us immensely."
CEO, Lloyd Companies
Eide Bailly’s expertise and specialty services are able to handle nearly anything that comes up in our company, from audits to tax planning, business valuation, cost segregation or 401k plan reviews."
President/CEO, Cass County Electric Cooperative
Why Choose Eide Bailly to be your Cost Segregation Partner?
Top 25 CPA firm
Nationally recognized industry specialists
$33+ million saved for clients over a one-year period
Knowledgeable professionals who understand your business
Request an Assessment
Taxpayers who spent at least $500,000 to purchase, build or renovate a building in the last 15 years may be sitting on a huge tax benefit. How do they find out? They do a cost segregation study. We’ve helped clients save more than $33 million over the past year. Contact us for a no-cost analysis to learn if you qualify for a cost segregation study.
Cost Segregation: The Right Asset Classification Produces Huge Savings
If you own real estate, cost segregation could be a very beneficial tax planning tool. IRS rules allow taxpayers to apply a cost segregation study any time after the building is purchased, renovated or constructed. Read more about the benefits of a cost segregation study and how we’ve helped clients see dramatic results.
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