If you recently built, purchased, or expanded your building, and the original cost of your building (excluding land) is over $500,000, you may be eligible for a tax holiday. Chortek can help you find out if you qualify by performing a cost segregation study.
A cost segregation study is a powerful, IRS-approved tool you can use to lower your taxes. With the study, we identify all the costs involved in the purchase, construction, repair, and renovation of your building. By identifying these individual costs, we help you accelerate your depreciation schedule. You can then reallocate costs on your buildings to receive a significant decrease in your current tax liabilities.
Decreased tax liabilities mean increased cash flow, which you can then reinvest back into the growth of the business. We can also recalculate prior depreciation. The difference between the old and the new serves as a one-time special tax deduction.
Commercial buildings and building improvements generally must be depreciated over a period of 39 years. A cost segregation study identifies building components that can be depreciated over a shorter time period — typically 5, 7, or 15 years, depending on the type of asset.
A cost segregation study can be performed for buildings that have been acquired, constructed, expanded, or updated. These types of buildings offer the greatest potential for savings:
- Industrial and manufacturing facilities
- Distribution warehouses
- Office buildings
- Apartment complexes
- Auto dealerships
- Strip malls
- Agricultural and biofuel production facilities
Contact Scott Henkel, CPA today with more questions and to determine if your business can benefit from a cost segregation study.