Engineering-based cost study that accelerates the timing of depreciation expense—creating cash flow benefits through tax deferral.
Typical reclassification averages 20% to 40% of building costs. Reclassification percentages vary by building type.
Engineering-based cost studies that identify building components eligible for accelerated depreciation—reducing current tax liability through timing differences.
Typical reclassification range
Engineering-based study
Cash flow benefits
Cost segregation is most valuable during specific business events or situations. Understanding when to pursue a study maximizes the return on your investment.
Immediately following a commercial property purchase, a cost segregation study identifies components eligible for accelerated depreciation.
Major renovations or tenant improvements create opportunities to reclassify costs that were originally depreciated over 39 years.
When accelerated depreciation would create meaningful tax deferral benefits that improve liquidity or fund operations.
Cost segregation studies require engineering analysis to properly identify and classify building components. Our approach produces defensible studies that withstand IRS scrutiny while maximizing legitimate depreciation acceleration.
The resulting cash flow benefits come from the timing difference between standard depreciation and accelerated depreciation—deferring tax payments and improving current liquidity.
Analysis follows established engineering methodologies for component identification.
Proper documentation supports depreciation positions if examined.
20% to 40% reclassification creates meaningful tax deferral benefits.
Engineering-based cost segregation with typical reclassification of 20% to 40%. Creates cash flow benefits through accelerated depreciation.