| Are you buying commercial property Did you know | | | | holding the property for at least a few years. |
| you can accelerate your depreciation? There are cost | | | | If your building qualifies, you will need to perform a |
| segregation services that can provide a study | | | | cost segregation engineering study. The best time to |
| allowing you to take advantage of the IRS cost | | | | have a study completed is when the building is |
| segregation rule. | | | | purchased or improved. However, the IRS does allow |
| Cost segregation is a popular, yet little known | | | | property owners to catch up on unclaimed |
| application which provides purchasers of commercial | | | | depreciation that was not claimed from day one. In |
| property with tremendous tax advantages. How? By | | | | order to complete a study, your cost segregation |
| reclassifying components and improvements on a | | | | service will probably need the following: 1) your |
| commercial building from real property to personal | | | | current tax schedule 2) building cost information 3) |
| property. Why is this so useful? Because it permits | | | | Change orders. |
| the owner to accelerate their depreciation from the | | | | When the study is complete (expect 4-6 weeks), |
| typical 27.5 to 39 years to a 5, 7, or 15 year | | | | your accountant will be able to file the necessary |
| depreciation schedule. Your current taxable income | | | | schedules to accelerate your depreciation. |
| will be greatly reduced and your cash flow increases. | | | | That is the basics. Discuss cost segregation with your |
| So how does it work? | | | | CPA and look for a qualified firm to provide the |
| First, does your property qualify? Yes, if you | | | | engineering study. Depending on the results, you |
| purchased, constructed, or improved the property | | | | could see thousands of dollars in tax savings. |
| after January 1, 1986. You must also anticipate | | | | |