Any business that has recently acquired improved real estate, or constructed new improvements, can likely reduce its taxable income for several years by segregating the property by type and depreciation rate. The cost segregation service offered by FCGI identifies and segregates assets that qualify as tangible personal property, other tangible property, land improvements and real property.
The advantages to the taxpayer are clear. Most businesses, when they buy or construct a facility, depreciate the improvements over thirty-nine years using a straight-line depreciation method. Our cost segregation service identifies assets that qualify for five, seven or fifteen year depreciation lives and accelerated depreciation methods, and establishes their cost. The result is increased non-cash expenses reported in the short term, reducing taxable income and tax liability. Cost segregation does not eliminate taxes owed, but can defer them until later years, resulting in a significant savings today.
The after-tax savings is commonly as much as twenty to fifty times the price of the cost segregation study. Today every $1,000,000 worth of property reclassified as a five year property has a present value of $200,000. The steps required to accomplish this include a detailed identification of a facility’s components; the appropriate classification of each component, or property unit, for tax purposes; and determination of the cost of each unit.
Our professional staff has the expertise in construction, construction cost estimating, tax regulations and court cases to perform cost segregation studies for any business from a single bank to a multinational corporation with facilities on several continents. If those studies are ever challenged, you can count on the expert testimony of our specialists to support our conclusions before regulators and the courts.
Business enterprises that benefit from our cost segregation service include:
- Apartments and Assisted Living
- Businesses with Tenant Improvements
- Data Processing Facilities
- Distribution Centers
- Energy Producers
- Health Care Facilities
- Movie Theatres
- Manufacturing and Industrial Facilities
- Office Buildings
- Research and Development Facilities
- Resorts, Hotels and Casinos
- Retail Facilities
- Sports and Recreation Facilities