What Is The Purpose of A Cost Segregation Study?
If you are a commercial property owner, Cherry Bekaert can provide you with a wealth of cost segregation services. By conducting a cost segregation study, we can help implement a proven tax planning strategy that allows an acceleration of substantial depreciation deductions and deferral of tax payments.
The ideal timeframe for a cost segregation analysis or a cost segregation study is within the same year you had a building constructed or purchased an existing structure. However, with our planning tools, we can perform a cost segregation study on a structure that was constructed or acquired several years earlier.
This is possible due to the IRS “catch-up” provision that, after a cost segregation analysis, allows you to realize any missed depreciation without having to file an amended tax return.
Cherry Bekaert’s cost segregation services can provide:
- A substantial reduction in tax liabilities
- Accelerated depreciation
- Increased cash flow
- The opportunity to claim “catch-up depreciation” from previously misclassified assets
- Reduction of real estate property taxes
What cost segregation could mean for your company under the Tax Cuts & Jobs Act:
The Tax Cuts and Jobs Act (“TCJA”) has had a substantial impact on virtually everyone, no matter if you are a large company or small business owner. While the TCJA may be overwhelming, Cherry Bekaert is here to help you understand how this new tax law could affect you and your company. Some of the key TCJA takeaways for cost segregation or depreciation includes:
- Increased bonus depreciation to 100% for new and used property through 2022 with a phase-down starting in 2023
- Increase of section 179 expensing to $1 million with a phase-out starting at $2.5 million
- Expansion of qualified section 179 property to include qualified improvement property and certain improvements (e.g., HVAC)