Your company’s real estate likely represents a large capital investment. With Dean Dorton’s engineering-based cost segregation study, you maximize your real property’s financial return by generating significant cash flow savings. Our cost segregation professionals generate cash tax savings by carving out shorter-lived assets, qualifying for five-, seven-, or fifteen-year write-off periods that are normally embedded in a building’s construction or acquisition costs, generally depreciated over 39 years.
Cost segregation is a highly specialized segment of tax law. The volume of judicial decisions, IRS rulings, regulations, and other interpretations spans thousands of pages of text. The challenge is to apply this complex knowledge to the unique facts of your industry, your company’s circumstances, and the processes of your operation. Because our team has conducted thousands of cost segregation studies throughout the United States, we bring vast practical experience to your project.
A nonspecialist accountant who segregates percentages of construction costs based on invoices or other means will likely leave valuable tax benefits “on the table,” and the resulting documentation may not withstand IRS examination.
If you own real estate and pay federal income taxes, you can benefit from the results of a cost segregation study. This article explains what a cost segregation study is, and summarizes the benefits to a property owner.
Did you know, that the Consolidated Appropriations Act allows for a tax deduction on commercial buildings of up to $1.80 per square foot for energy-efficient features of the buildings construction? This article gives the details of several energy efficient tax incentives that can help you save this tax season.
Through our cost segregation studies, you can accelerate income tax depreciation deductions, providing you with improved cash flow. The Dean Dorton cost segregation study will help you uncover these buried tax savings from:
New buildings presently under construction
Existing building undergoing renovation, remodeling, restoration, or expansion
Purchases of existing properties
Office/facility leasehold improvements and “fit-outs”
Post-1986 real estate construction, building acquisitions, or improvements where no cost segregation study was performed (even though the statute of limitations previously closed on the property construction/acquisition year)
Property acquired under Section 1031 exchanges
Purchases or inheritances of interests in partnerships which own appreciated buildings
Benefits of Cost Segregation Studies
Our clients benefit from cost segregation studies through greatly improved cash flow savings. One of Dean Dorton’s most recent cost segregation studies was on a $7.3 million manufacturing facility that was purchased and renovated in 2013, generating tax savings in the first year of $145,000. The present value of accelerated deductions (discounted at 8%) exceeded $267,000. The return on investment for this study was 44.5 to 1.