A cost segregation study can be a powerful tool for commercial property owners and investors. This in-depth analysis can offer significant tax benefits and improve cash flow.

Tax Savings

• A cost segregation study allows property owners to accelerate depreciation deductions, leading to substantial tax savings.
• Owners can retroactively claim missed depreciation deductions without amending prior years' tax returns.

Improved Cash Flow

• By accelerating depreciation, owners can reduce their current tax liability, improving their cash flow.
• This additional cash can be reinvested into the business or real estate portfolio.

Detailed Asset Breakdown

• Cost segregation studies provide a detailed breakdown of a property’s cost components, which can be useful for property management and insurance purposes.

Key Terms

• Cost Segregation: The process of identifying personal property assets to accelerate depreciation deductions, reducing tax payments, and increasing cash flow.
• Accelerated Depreciation: A method that allows businesses to deduct the cost of a purchased asset more quickly than with the straight-line method.undefined

This provides a general overview, a cost segregation study is a complex process that should be undertaken with the help of a tax professional or a certified cost segregation specialist.

Visit the CCPIA website for more information about Cost Segregation Study and this article about Cost Segregation Study in Commercial Real Estate.

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