Cost Segregation

Cost Segregation is a valuable strategy to increase cash flow and reduce income taxes for commercial property owners and lessees. The tax benefits of cost segregation can be applied to various types of real estate: apartments, assisted living/nursing homes, auto dealerships, office buildings, restaurants, manufacturing, hotels, medical buildings, retail space and others. Only about 10% of eligible businesses are currently taking advantage of a cost segregation study.  The main reason is lack of education or misinformation.  Thus it is critical that you use a trusted advisor to help you understand how you may qualify for this timely deduction.

What is a Cost Segregation study?

At TSG, we help you identify assets within your building that can be reclassified into a much shorter depreciation recovery period than the building itself. Our team of engineers and CPAs can maximize your tax benefits by identifying, classifying and segregating the personal property components and land improvements of the building, resulting in depreciable lives of 5, 7 and 15 years using accelerated depreciation. As an IRS approved tax strategy, a Cost Segregation study decreases your tax liability while adding cash to your company’s bottom line.

What types of properties will benefit?

  • New construction
  • Purchase of existing property
  • Renovations or expansion
  • Existing property placed in service after 1986 (“look-backs”)
  • Leasehold improvements
  • Real property stepped-up through estate

Legal Entity

  • Pass Through Entities such as: Sole Proprietorships; Partnerships, LPs, LLPs, S Corps, Certain Trusts, LLCs
  • C-Corps
  • REITs
Scroll to top