Cost Segregation Studies
"Cost Segregation Studies are a lucrative tax strategy that should be
considered in almost every real estate purchase." - US Treasury Department
Cost Segregation is a tax strategy approved by the IRS in 1997 to reclassify specific real estate property assets that usually receive a depreciation life of 39 years or 27.5 years into "tangible personal property" that is treated as 5 year property or land improvements which are treated as 15 year property for depreciation purposes. Due to this improved treatment, portions of the electrical, plumbing, mechanical systems and site improvements of a building along with hundreds of other components can be allocated into shorter lives translating into immediate cash flow.
By recouping up to 40% of the building cost over the first 5 years as opposed to depreciating it over 39 years, owners see significant tax savings and tap into the concept of the "time value of money". On average, a Back in the Black Cost Segregation Study offers approx. $150,000 in additional depreciation per $1 million in purchase or construction costs over the normal 39 year straight line method.
Click here to see a chart showing reclassification percentages for various business types.
Contact Back in the Black today to schedule your cost segregation study. We work with your financial team to capture the maximum value for your business. No risk assessment.
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