In 2014, cost segregation services made Accounting Today’s list of top niche services for increasing business for the first time in 15 years. Since then, the niche has grown into a strong consulting service for CPA firms.
The latest tax reform had made cost segregation even more beneficial to CPA firms and their commercial real estate owner and investor clients through two changes in bonus depreciation. As you know, bonus depreciation enables businesses and individuals to deduct a percentage of the cost of their assets the first year they are placed in service. Thanks to changes in the tax law, used property is now eligible for bonus depreciation, and bonus depreciation is 100% through tax year 2022.
Over the years, the process, application and value of cost segregation has steadily improved into a much greater tax tool. Cost segregation studies greatly benefit real estate clients, and the ability for CPAs to assist clients in reducing their tax liability has never been better. In addition to accelerating depreciation, the studies also serve to identify missed deductions and increase cash flow.
The Value of a Cost Segregation Study to CPA Clients
A good cost segregation study conducted by qualified engineers digs much deeper to find more than accelerated depreciation. For example, when the tangible property regulations changed, Engineered Tax Services was able to grow our premium cost segregation studies to:
- Accelerate depreciation
- Identify the design or renovation of energy-efficient HVAC, lighting systems, and building envelope qualifying for up to a $1.80/sq ft tax deduction under the energy tax deduction (179D EPAct)
- Give a detailed fixed asset accounting of a client’s real estate investments for dispositions for undepreciated and retired assets
- Expense undepreciated basis of property subject to qualified repair
- Expense undepreciated basis subject to routine maintenance
- Manage and minimize recapture upon property sales
- Identify and recognize units of property and interdependent systems
- Capture bonus depreciation for reclassified assets
These benefits underscore the value cost segregation studies provide to CPA clients as a top niche consulting service. We have found that the use of premium cost segregation studies has helped our partner firms attract new clients, retain existing clients and secure consistent revenue growth and firm expansion.
The engineering and tax professionals on the cost segregation team at Engineered Tax Services have helped accountants and their clients increase their cash flow by identifying and reclassifying assets of their building for faster depreciation.
Engineered Tax Services partners with CPA firms across the U.S. to find new revenue streams through cost segregation studies for their clients. The use of premium cost segregation studies has helped our partner firms attract new clients while retaining existing ones. We understand the tax ramifications that must be considered when conducting a cost segregation study as it relates to the issues of recapture, passive activity limitations and the intricate steps involved in 1031 exchanges. Through our services, you can diversify your CPA firm and attract new clients to your firm.
To learn more about how Engineered Tax Services works with CPA firms to provide cost segregation services, call Engineered Tax Services at (800) 236-6519 or visit our cost segregation page for more information.