Added Tax Benefits of Cost Segregation

[Julio Gonzalez]

Cost segregation is an amazing tax savings tool. Many know the standard benefits such as accelerated depreciation and bonus depreciation. But did you know that there are multiple other added tax benefits of a cost segregation study?

Some of the additional benefits include:

• Reduction in current tax liability
• Insurance savings
• Immediate increase in cash flow
• Minimization of recapture upon sale of the asset
• Identifying disposition expenses
• Identifying repair and maintenance expenses
• Energy cost savings
• Construction tax planning
• Preservation tax credits (historical and new market)
• Fixed asset review
• DEIRA Reports (reduces insurance premiums, benchmarking reports, energy audits and reserve studies)

Depending on the state in which you own the property, you may also qualify for state tax

deductions or credits which can be identified with a thorough cost segregation

study.

Real Estate is such a unique type of investment and pairing it with cost segregation makes it even more unique. You could buy stock...but you can’t expense that. Bonds? Can’t expense those either. Funds? Nope, no expensing allowed. The gift of real estate. You buy it, you get to expense it, it generates income and hopefully appreciates in value. You combine investing in real estate with the power of expensing the building with a cost segregation study is magical!

What additional tax benefits have you found through the use of a cost segregation study?