Cost Segregation is a strategic tax planning technique that enables businesses and individuals involved in real estate construction, purchase, expansion, or renovation to boost cash flow. This is achieved by speeding up depreciation deductions and postponing federal and state income taxes.
When acquiring property, it encompasses not just the building but also all its interior and exterior elements. Typically, 20% to 40% of these components qualify for quicker tax write-offs compared to the main structure. A Cost Segregation study breaks down the construction cost or purchase price, which would normally be depreciated over 27.5 or 39 years. The key objective of this study is to pinpoint all costs related to the property that can be depreciated over 5, 7, and 15 years.
With over 35 years of expertise, our team at ABGi has delivered hundreds of millions in benefits through Cost Segregation and other specialized tax incentives. Below is a sample of our esteemed clients. Contact us if you’d like to view the full list.
If any of the situations below apply, contact ABGi to learn what opportunities exist to use a Cost Segregation study to lower your tax bill.
Many business owners are amazed by the significant tax savings a Cost Segregation study can offer. Here are three key benefits: