Cost Segregation

Identifying the Correct Asset Categories for Tax Reporting

Cost segregation analyzes buildings to accelerate depreciation deductions. By identifying components within the building that are used for the business function of the facility as opposed to general building use, these items can be reclassified to a shorter recovery period to accelerate depreciation deductions and increase cash flow.

To complete a cost segregation analysis, basic information on the building is provided including any blueprints of the facility, purchase agreements, appraisals, and/or construction invoices. A site visit is completed of the facility to confirm building components and provide additional documentation. Through engineering estimation, building components are identified and assigned costs. These components are then assigned a recovery period according to current legislative or judicial authority.

By accelerating depreciation deductions, you can benefit by increasing cash flow and take advantage of the time value of money. Additionally, with the release of proposed regulations related to the real property definition for Section 1031 exchanges, a cost segregation study would be able to assist in identifying any personal property that may be attached to the building and would be ineligible for 1031 exchange treatment under these proposed regulations. It is also helpful to have the building components identified for any future repair or renovations to assist in determining classification as repair or calculation of a partial disposition deduction.

Let's Start a Conversation

Julie Helms, CPA | Director, Specialty Tax Services

The Lurie Difference: A Streamlined Process

Lurie’s Specialty Tax Services advisors offer unique tax savings and reduction strategies for businesses and their tax concerns. The team works closely with you and your service partners to provide counsel and execution on matters that extend far beyond compliance. This close collaboration provides not only coordinated, seamless service with specialists who have deep expertise, but also delivers true dollar cost savings. Here is what to expect: 

We Examine Your Indicators

Own a building or tenant improvements that have all been classified as 39- or 27.5-year property

We Help You Uncover Benefits

Acceleration of depreciation

Questions? Let's start a conversation.

Latest Tax Credit & Incentive Insights

Learn more about our team’s expertise and innovative ways we are helping businesses and organizations expand opportunities through strategic tax planning.