A Cost Segregation study can drastically improve cash flow by accelerating depreciation deductions, which offset taxable income. The study can typically generate cash savings between 2.5% to 10% of the building’s cost.
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Residential rental property is depreciated over 27.5 years, while commercial real estate is depreciated over 39 years. IRS rules allow non-building components such as personal property and land improvements to be segregated from the building and depreciated more rapidly, generally over 5, 7, and 15 years.
Proven Experience, Measurable Impact
Kitchen countertops and cabinetry, shelving, window blinds, removable floorcoverings, parking lots and walkways, pools and tennis courts.
Casinos Electrical systems associated with particular machinery and equipment located within casino area, security monitoring systems to surveil gaming activities, decorative finishes.
Process-related plumbing and electrical systems, additional ventilation, fire protection systems dedicated to specific business operations.
Electrical systems dedicated to refrigeration and point of sale equipment, signage, music systems.
Decorative lighting such as wall sconces and chandeliers, removable flooring, window treatments, kitchen equipment, decorative millwork.
Network cabling, raised floors and HVAC systems dedicated to IT equipment, uninterruptable power supply systems.
Kitchen cabinetry, exhaust hoods and kitchen ventilation, decorative items, drive-through equipment, electrical for televisions, plumbing and electrical systems dedicated to food preparation.
Merchandise lighting, electrical for point of sale equipment, security cameras, removable floor coverings, monument signs.
Truck turnarounds, loading ramps, parking lots, in-rack fire protection systems, pylons.
IronGate can perform Cost Segregation studies without historical construction documents by applying the same cost estimation techniques and software used by construction professionals.
The benefits of a Cost Segregation study go beyond accelerating the timing of deductions. Taxpayers are allowed to write off and take losses on disposed building components.
Cost Segregation identifies building components such that if a taxpayer replaces the roof, upgrades lighting, or overhauls HVAC systems, they may be able to recognize losses on those disposed assets.
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Cost Segregation not only accelerates depreciation but also creates long-term financial flexibility. By identifying and isolating assets, businesses gain more control over future upgrades, replacements, and tax planning strategies.
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