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.
What is Cost Segregation?
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!
How does Cost Segregation work?
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.
What types of property benefit from Cost Segregation?
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!
How do I get started?
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.