Reduce Your Tax Burden With a Cost Segregation Study
An engineering-based cost segregation study is a tax planning tool that can dramatically lower the tax liability tied to real estate. It’s an affordable investment for commercial property owners that can yield large returns, and Veritax Advisors can help you get it.
What Is a Cost Segregation Study?
Overview & Qualifications
A cost segregation study is a tax planning tool that’s based on a detailed process that identifies all the costs associated with a building’s purchase, construction, or renovation. Each cost identified is assigned its shortest possible recovery period per IRS guidelines.
This allows owners to increase depreciation deductions, reduce their income tax liabilities, and maximize cash flow from their real estate investment. Veritax’s cost segregation studies are an affordable investment for real estate investors and yield significant returns.
Our cost segregation advisors will determine if your property is a good fit for the study by first preparing an initial detailed no-cost analysis in which we analyze the benefits of performing a study. During this time, we’ll also ensure you meet the minimum qualifications for a study, which are as follows:
- You have taxable income
- You have purchased, constructed, or renovated (including tenant improvements) a commercial real estate property in the last 20 years
- Your purchase or construction costs are $250,000 or greater
Once our team of cost segregation tax and financial advisors have determined that there are significant benefits to performing a study and that you qualify, we’ll begin requesting all appropriate documentation, such as:
- Building plans
- Construction drawings
- Purchase agreements
Once we’ve completed the data collection phase, we’ll visit your property to determine the accuracy of the building plans and identify the building components that qualify for a shorter recovery period. This is documented through measurements, pictures, and field notes.
All information we’ve gathered up to this point is entered into specialized engineering software. That software integrates the plans of the building and calculates the measurements and counts of all building components. Finally, we download the data into our powerful proprietary software that assigns pricing and recovery periods to each component.
All studies include a thorough review and documentation of the tax law that allows taxpayers to assign a building component to a shorter recovery period.
If the study is being done on a property constructed or purchased in a prior year, we will provide the appropriate information to file IRS Form 3115 (Change of Accounting Method).
Download a free Veritax cost segregation case study to see just how this indispensable planning tool lowers taxes, increases cash flow, and frees up assets for additional investment.
Cost Segregation FAQs
Does my tax preparer already do this?
Do I need to amend my tax return to get cost segregation tax benefits?
How much does it cost, and how much will I save?
Won’t my property depreciate anyway?
Does it matter if the real estate is in a separate entity from the operating entity?
How do I get started?
What Our Clients Say
We really enjoyed working with Veritax Advisors; they provided us with significant value. We particularly appreciated that they inspected our property to get first-hand evidence of equipment and infrastructure.
Other Tax Credits & Deductions
Cost Segregation Study
Real estate investors can increase depreciation deductions, reduce income tax liabilities, and maximize cash flow.
R&D Tax Credit
Companies can get a tax credit for developing lighter, faster, more durable, less expensive, more reliable, or more precise products.
Tangible Property Regulations
Property owners can expense some of their building-related expenditures, such as supplies or repairs, to reduce taxable income.
U.S. Export Tax Incentive
Export companies can take advantage of IC-DISC, which provides certain tax incentives for U.S.-based exporters.
Energy Efficient Tax Incentive
Building owners, architects, and engineers that go green can save green with the 179D tax deduction.
Start by scheduling a meeting for a free consultation. Let’s talk about the specialty tax programs that can equate to significant savings.