If you are a real estate investor, you should be taking advantage of cost segregation studies. Find out why below.
The Benefits of Cost Segregation To A Real Estate Investor
Cost Segregation is an IRS approved tax strategy that increases near-term cash flow by utilizing shorter recovery periods to accelerate the return on capital from your investment in property. The difference is a change in depreciation from a 27.5 or 39-year period down to 5, 7 or 15 depreciation year periods. Whether newly constructed, purchased, or renovated, the components of your building may be properly reclassified through a cost segregation study into shorter recovery periods for computing depreciation deductions.
How Important Is A Cost Segregation Study?
A property will only be approved for IRS accelerated depreciation if an engineering-based cost segregation study is performed by specialized experts. Even if you are depreciating in an accelerated manner, you may still be missing out on benefits. Engaging with an engineering firm like Engineered Tax Services will ensure you are working with professionals qualified in identifying all of the opportunities available to you.
Tax Benefits From Cost Segregation Studies
Cost segregation defers tax liabilities and allows investors and building owners to use this benefit to:
- Leverage their real estate investment to scale their business
- Pursue other opportunities that offer significant returns
- Invest in new equipment, warehouse management software and add a small off-hours staff
- Implement new product concepts to production and launch
- Invest in other areas of the business for business growth the options are endless
With Engineered Tax Services’ next-generation cost segregation studies, we work to uncover potential tax savings and increase cash flow through reclassification and depreciation of property. We also provide a detailed engineering review as part of our reporting process and work seamlessly with the IRS and your CPA firm for minimal disruption to you.
For more information about how a cost segregation study can benefit your real estate investment, please contact Engineered Tax Services at (800) 236-6519.