Whether you are constructing, purchasing, or expanding a building, or even relocating, KatzAbosch can show you how your property can significantly increase your cash flow by accelerating tax deductions.
A cost segregation study can also be done on property purchased or constructed in a prior year, resulting in a catch-up deduction in the current year.
Benefits of Conducting a Cost Segregation Study
A thorough cost segregation study is completed through the joint effort of a qualified financial professional and construction engineer. The main goal is to clearly distinguish between all personal assets connected, adjacent, or integral to a commercial property.
Personal property can be depreciated over a much shorter tax life than non-personal property. This shorter tax life allows for maximum tax savings by adjusting the timing of tax deductions. This can lead to the release of cash which can then be used for investment purposes or to cover business or building operational costs.
How Does a Cost Segregation Study Decrease Your Taxes?
A cost segregation study carefully breaks down construction and/or acquisition costs and allocates them to specific asset categories, maximizing depreciation for qualifying costs. Our study allocates such costs to 5, 7, and 15-year asset classes versus 27.5 or 39 years – the shorter the depreciation period, the greater your tax deductions and cash flow. The incentive to do a study has been significantly expanded as a result of recently passed tax acts.
A KatzAbosch cost segregation study is based on an engineering approach combined with work paper documentation that provides the kind of detail and support acceptable to the IRS and Tax Court.
Professional Advice
Due to the potentially delicate nature of a cost segregation study a financial professional should always be consulted so pitfalls are avoided and maximum savings are realized.
You need a firm with experience in cost segregation to assist you in classifying your property to save money now and in the future. KatzAbosch works closely with professional construction engineers in and around the Baltimore region that have a thorough knowledge of the tax code and working with the IRS. Their experience in successfully defending cost segregation studies can be put to use for you through their affiliation with KatzAbosch.
