Cost Segregation Study Results In 215000 Tax Deduction

Jan 03, 2011

Cost Segregation is an IRS-approved application by which commercial property owners can accelerate depreciation and reduce the amount of taxes owed.  This savings generates cash flow that business owners may use to reinvest in the business, purchase more property or pay themselves bonuses.

It’s simple, legal and recommended in the August 2004 issue of the Journal of Accountancy for CPAs. 

My client owns an office building with a cost of about $1.8 million. After completing a preliminary analysis I recommended engaging a cost segregation firm specifically focused to perform engineering-based cost segregation studies.  The study resulted in an increased depreciation expense of $215,000 or an increased after tax cash flow of $75,000 in the first year.

The good news is that you can still complete a cost segregation study in 2011 and claim the benefits in your 2010 tax return!

If you are the owner of commercial properties valued at $300,000 or greater, contact your B2B CFO® partner to determine if a cost segregation study can you increase cash flow.


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