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Commercial cost segregation, also known as depreciation acceleration, is a complex process of separating and re-classifying personal property assets from real property assets - essentially converting them from real property to personal property.
Personal property consists of a building's non-structural elements, exterior land improvements and indirect construction costs. The foundation for cost segregation is a thoroughly researched and compiled cost segregation report. Such a report can uncover "soft costs" such as architectural plans, carpeting, lighting, landscaping, and some elements of the electrical system.
The purpose of this process is to allow assets to be depreciated on an expedited 5,7, or 15 year schedule instead of the more conventional 27.5 or 39 year depreciation of real property. The benefits to a cash-strapped company are immediately obvious - a decrease in taxable income and a resultant increase in cash flow.
Business owners who are unaware of the benefits of cost segregation or do not take the initiative to order a cost segregation report are leaving money on the table each time they file their taxes.
A cost segregation report may be the single greatest investment that a business owner or commercial property owner will ever make. It can produce a substantial return on investment year after year.
We can produce solid, defendable maximum deductions which can stand the scrutiny of the IRS.