What is Cost Segregation?
Cost Segregation is an engineering-based, tax savings tool to help companies that have acquired, renovated, constructed, or expanded real estate to reduce current income tax liabilities by accelerating depreciation deductions for qualifying components.
We help clients identify assets within a building that can be reclassified into a much shorter depreciation recovery period than the building itself. Real estate properties are generally depreciated using a straight-line method of 39 years (27.5 years for residential properties).
Scarpello Consulting’s team of engineers and CPAs can maximize your tax benefits by identifying, classifying and segregating the personal property components and land improvements of the building, resulting in depreciable lives of 5, 7 and 15 years using accelerated depreciation. As an IRS approved tax strategy, a Cost Segregation study decreases your tax liability while adding cash to your company’s bottom line.