LandAmerica proudly announces the addition of Cost Segregation to our extensive line-up of commercial real estate services. Cost Segregation is a valuable tool which can provide a significant cash flow benefit to owners of commercial real estate by correctly identifying and allocating depreciation deductions. Owners of commercial real estate should absolutely familiarize themselves with this service, and we encourage you to explore how it could benefit you.
Cost Segregation is a widely accepted tax strategy used to accelerate depreciation deductions by identifying certain building components and allocating them to an accelerated depreciation schedule of 5, 7 or 15 years. This method does not create any new deductions, but rather moves deductions forward that might otherwise take 27.5 or 39 years to fully realize. Once performed, the accelerated depreciation schedule and resulting tax deferral greatly improves cash flow—essentially creating an interest-free loan from the government!
A detailed engineering study, performed by an independent third party, should be used to identify and value these short-life components in conformity with IRS guidelines. The study must be based on sound cost estimating techniques and performed by a qualified firm. Following a site visit and document review, a detailed breakdown of costs and proper allocations is provided to the client, to be turned over to their tax professional.
Office buildings, hotels, retail stores, apartments, manufacturing facilities and other commercial buildings constructed or acquired after 1986 generally benefit from Cost Segregation. IRS guidance permits a depreciation “catch-up” on property placed into service in prior years, without amending tax returns. The favorable depreciation adjustment can be taken in one year!
Give us a call! We’ll provide you with a free estimate of your potential Cost Segregation benefits and talk about Cost Segregation and how it fits in with our other commercial real estate services, such as construction and project management, technical and environmental due diligence, valuation and more.
For more detailed information about our Cost Segregation services, please email us or call us, toll-free, at 1-800-419-4923.