Cost segregation studies
Defer Tax Liabilities and Hold On to Cash Longer
Cost segregation and other fixed asset studies can create significant tax benefits for owners by accelerating tax depreciation deductions. Cost segregation studies assign certain building costs to shorter depreciable tax lives. The resulting accelerated depreciation can result in the deferral of substantial amounts of tax. Other fixed asset studies accelerate deductions by identifying deductible repair expenses, de minimis expenses, or amounts that may be deducted as partial (or full) dispositions.
CohnReznick’s fixed asset team includes engineers and tax professionals (such as former IRS attorneys) with deep tax technical and construction industry experience. We perform cost segregation and other fixed asset studies for:
- Recently acquired and constructed real property.
- Real estate acquired or constructed in prior years.
- Costs to expand or renovate real property.
- Property stepped-up to market value.
- Other situations, such as tangible property regulations and de minimis or partial disposition.
IS A COST SEGREGATION OR OTHER FIXED ASSET STUDY RIGHT FOR ME?
If your property cost is more than $2 million, you plan on retaining it for two or more years, or you can benefit from accelerating tax depreciation, then a cost segregation or other fixed asset study could generate significant tax deferral.
Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
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