Cost Segregation Studies

An often-overlooked tax-savings opportunity is accelerated depreciation of costs associated with the construction, renovation or purchase of a new building or real estate.

By identifying assets that qualify for shorter depreciable lives, you are able to accelerate tax depreciation and lower your current income tax. Our team can help ensure you maximize your investment.


Through a cost segregation study, an asset’s depreciable life is shortened where appropriate. This in turn accelerates expense and decreases taxable income. As a taxpayer, you pay less tax during the early stages of a property’s life.

Create An Audit Trail

A properly documented third-party cost segregation study can help resolve IRS inquiries at the agent level, while improper documentation of cost and asset classification can lead to an unfavorable audit adjustment.

Reduce Real Estate Tax Liabilities

Real estate taxes may be reduced by separating tangible personal property from the nonresidential real property being constructed. Even if a jurisdiction imposes a personal property tax on business property, tax savings may be realized due to substantially shorter personal property lives and faster devaluation of assets.

Specific Sales Tax Exemptions

Substantial sales tax savings may be achieved by classifying tangible personal property as industrial machinery and equipment. Many states provide a sales tax exemption to a company purchasing qualifying industrial machinery and equipment. Sales or use tax exemptions represent immediate and permanent cash savings.

Finding Benefits For Your Properties

Cost segregation studies benefit a wide range of properties. If your company is constructing or planning to construct or substantially remodel a new building or facility, a cost segregation study is a must.

The benefits do not stop with new construction. If you have a post-1986 real estate construction, building acquisition or improvement, there are opportunities to minimize your tax liability. Assets within existing property constructed anytime, but placed in service after 1986, can also be segregated. Even office leasehold improvements and “fit outs” contain tax-saving opportunities.

Realizing The Most From Each Project

Be certain you are obtaining the maximum cost recovery deduction allowed by law. Our professionals have extensive experience in the area of cost segregation, performing studies on various types of buildings and real estate.

Contact an ACT Advisor