Cook Martin Poulson is a full service CPA firm. We don’t just get your taxes done, we actively work to minimize your tax bill. One of the strategies we use is cost segregation studies for commercial and residential properties. Cost segregation is the IRS approved method of reclassifying components and improvements of your commercial building from real property to personal property. These studies allows the assets to be depreciated over a 5, 7, or 15 year life instead of the traditional 27.5 or 39 year life. This means your current taxable income will be reduced and your current cash flow will increase.
Cost segregation studies are a highly specialized process that includes an engineering-based breakout of the components of a property. We partner with highly skilled engineers and architects to conduct the studies and complete the report that is filed with the IRS. At CMP we work hard to educate our clients and others on the benefits of cost segregation studies. We regularly teach classes, create blog posts and are members of local real estate organizations.
What Types of Buildings are Eligible?
- Commercial buildings of any kind constructed or purchased since 1987
- Apartment Buildings
- New or Existing Buildings
- Buildings purchased or constructed since 1987 are eligible for “catch up” adjustments
- Tenant leasehold improvements
Benefits of a Cost Segregation Study
- Reduces income taxes
- Generates immediate increase in cash flow through accelerated depreciation deductions
- Provides opportunity to claim “catch up” depreciation on previously misclassified assets
- Provides an independent third-party analysis that will stand up in IRS review
Do you Qualify for a Cost Segregation Study?
Contact the professionals at CMP and we will help you determine if a cost segregation study is right for you.