When does it make sense to invest in an engineering-driven cost segregation study?
An engineering-driven cost segregation study can be useful at any point in the real estate cycle. Whether a property has been newly constructed, recently acquired, or undergone renovations or tenant improvements, a cost segregation is likely to be a valuable depreciation tool. In certain cases, a look-back study can be appropriate.
Bottom line: If you own your building or if you’ve made improvements (as an owner OR a tenant), you may benefit from a cost segregation study.
What are the benefits of an engineering-driven cost segregation study?
A detailed, high-quality engineering analysis provides the documentation that’s essential for accelerating depreciation. It’s important to remember that a cost segregation study isn’t generating “new” deductions. Rather, it’s speeding up your ability to claim deductions. In many cases, a cost segregation study can help you accelerate the recovery period for 20% to 40% (or more) of your depreciable cost basis.
Businesses routinely write off adjusted basis when they retire fixed assets. Yet, many neglect to apply that same strategy to what is often their most significant fixed asset: their real estate. In many cases, the reason is that they simply lack the cost details that are required to properly leverage this tax strategy.
How can we get started?
Getting started is simple. Whether you’re part of an accounting firm or you own or lease commercial real estate, contact Capstan for a complimentary consultation and assessment of your needs.