Engineered Tax Services has helped thousands of self storage property owners nationally increase their cash-flow by accelerating depreciation through our cost segregation studies. This extra cash flow is significant and immediate, opening the door for more opportunities to purchase additional investments and perform necessary renovations or improvements to the properties.
What is Cost Segregation:
A cost segregation study is a cash-flow strategy to uncovers potential tax savings through the reclassification and depreciation of property. It is a federal income tax tool that utilizes shorter recovery periods to accelerate the return on capital from your property investments. Whether newly constructed, purchased, or renovated, the components of your building may be properly classified into these shorter recovery periods for computing depreciation. The study carves out certain qualifying portions of your building into 5, 7, and 15 year lives that are normally buried in 39 or 27.5 year categories. A cost segregation study is not only beneficial for newly constructed buildings but can also uncover significant tax benefits for older buildings due to the catch-up depreciation.
Benefits of Cost Segregation
- Accelerate depreciation
- Reduced corporate/individual income taxes
- Quicker return on investment
- Reduce property tax
- Decrease insurance premiums
Items To Be Reclassified
- Site Improvements (landscaping/parking)
- Light Fixtures
- Branch wiring
- Special Plumbing
- Flooring
- Millwork
- Millwork Window Coverings
- Partition Walls
- Cabinetry
- Furnishings
- Shelving
- Wall Coverings
The list digs much deeper into the assets of the building and requires a cost-estimating background by a qualified professional in order to maximize the tax benefit. Therefore, a cost segregation study completed by a construction engineer is more reliable than one conducted by someone with no engineering or construction background.
ETS' licensed engineers 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 your business. Contact Engineered Tax Services at 800-236-6519 or email here for a complimentary analysis of your storage facility and/or real estate investment.
