Cost Segregation - A Brief Overview
APPRO Development and CERRON Commercial Properties can assist you in determining if a cost segregation study is right for you. Cost Segregation can impact your company’s bottom line and provide reduction of tax payments.
We provide our clients with detailed cost segregation strategies and services for commercial real estate properties. Our cost segregation strategies can benefit new construction, existing properties, acquisitions, redevelopment and more.
Cost Segregation can be confusing, but we are here to help! We have put together some information to help answer your questions. If you have more questions, or are ready to receive your FREE consultation, contact us today and we will get started.
What is Cost Segregation?
- Does the property have an adjusted cost basis of $1,000,000 or more?
- Will the property be held for at least one year?
- Property owner must be a “for profit entity” and pay Federal Income Tax.
- Isolating eligible cost values from initial concept through design and construction of the project.
- Separate costs and components that are production or tenant specific and disclose on Certificate of Real Estate value to exclude stated values from Real Estate Market Value – thereby reducing real estate taxes – in perpetuity.
Cost Segregation for New Properties or Expansions
- Depreciation: Personal property can be deducted in shorter terms (5, 7, or 15 years) than real property (27.5 to 39 years)!
- Existing Property: A business may be able to carry back net operating losses to a previously profitable year and obtain a refund paid in that year!
- Lower Tax Payments: A business may be eligible to receive lower property and transfer tax savings.
Recent Cost Segregation Actions
- Cost Segregation and the New 5 Year Carry Back Rules – President Obama signed H.R. 3548, The Worker, Homeownership, and Business Assistance Act of 2009 into law. One of the provisions of the act is the extension of a Five Year NOL (Net Operating Loss) carry back to most businesses for 2008 or 2009.