Cost Segregation Studies for Cash Flow Enhancement

If you or your company owns a commercial building, an inexpensive cost segregation study may significantly reduce your taxes.

As a result of a lawsuit by Hospital Corporation of American (HCA), the Courts directed the IRS to revise its guidelines for the depreciation of commercial buildings. Any building built or acquired in 1986 or thereafter qualifies. New IRS guidelines, all 140 pages of them, can be found on the IRS website Enter cost segregation study in the search modules and search “entire site”. The complete website address is here.

The old IRS depreciation guidelines only allowed 39 ½ year straight line depreciation unless the building was used for human inhabitance, i.e. an apartment. These buildings allowed 27 ½ years straight line depreciation. By generating a cost segregation study, a substantive number of building components can be depreciated in 5, 7, and 15 years.

This significantly reduces tax liability. The courts also mandated that when a cost segregation study is completed, the building owner can recoup the depreciation allowance from prior tax periods back to purchase or construction. This can have a very significant impact by allowing a building owner to recoup taxes paid in prior years.

Would you like a free analysis of the impact a cost segregation study can have on your building and taxes? Starmont along with its partner, Cost Segregation Services, will be happy at no cost or obligation, to provide you a preliminary analysis of tax impact along with a price for completing the study. They will allow you to make an informed cost benefit analysis. We promise you will be exceptionally pleased and surprised at the benefits of a cost segregation.

If you would like additional information on cost segregation or would like to get the free analysis process started, give us a call at 225.620.0990