What is Cost Segregation?
Cost Segregation is a strategic tax tool for building owners
to allocate building costs between real estate and personal
property based on case law and IRS guidance. Using qualified
construction engineers and estimators, Duffy + Duffy
will perform your study to meet IRS Cost Segregation Audit
Guidelines. Your business will realize immediate tax savings
and increased cash flow. The law also allows you to recover
taxes for deductions not taken in previous years.
Who qualifies?
Any building in excess of $300,000 in value that has been
purchased constructed or had substantial improvements to
their property since 1987. Savings can begin with the first
tax return through increased depreciation deductions on the
newly segregated costs. If the construction or purchase was
made previously, “catch up” depreciation is allowed.
What types of buildings are eligible?
- Commercial buildings of any kind constructed or purchased
since 1987 are eligible.
- New buildings qualify for accelerated depreciation
deductions starting right away.
- Buildings purchased or constructed since 1987
are eligible for “catch up” adjustments
producing large tax deductions and increased cash
flow.
- Commercial buildings can be owned by the operating
company or by an individual, a LLC, a partnership or
Family Limited Partnership.
- If the operating company or real estate holding entity
is paying taxes, there will be savings.
