COST SEGREGATION ANALYSIS
Unearth tax savings in your real estate.
Whether a new development, a remodeling, or a purchase, there can be buried treasure in your real estate holdings. Finding it is possible through a cost segregation analysis, a comprehensive study of construction and remodeling costs, qualifying personal property, and other items. In most cases, a cost segregation study pays for itself within the first year by:
- Accelerated depreciation on income taxes. Our comprehensive study identifies items which should be reclassified into a faster depreciation method. Many items that should not be considered real property are being deducted over 39 years.
- Future income tax savings. An analysis earmarks items in future years which can be written off as disposed assets, thus reducing income taxes.
- Reduction on property taxes. By shifting assets to a shorter class life, their value for property tax purposes decreases at a quicker rate. Therefore, a substantial savings in property taxes could be realized.
- Savings on insurance premiums. The value of land and building foundations can be removed from the value insured by certain policies. These components need not be insured for situations like fire loss and are often included in insurance coverage, resulting in higher insurance premiums.
An independent, certified public accountant should issue a cost segregation report. This gives credibility and authority to the report in case of an IRS audit. Windham Brannon personnel are experienced and qualified to help you with your cost segregation study.
