Cost segregation identifies building components that are eligible for accelerated depreciation. Most buildings are depreciated for tax purposes over 39 years. By identifying, calculating and classifying costs to shorter tax lives of 5, 7 or 15 years, at accelerated rates, owners are able to increase tax deductions in the early years, when cash flows are most critical. Many of these shorter-lived assets are eligible for federal bonus depreciation of up to 100%, creating even more savings.
Fixed Asset Rules and Regulations
Tax laws are always changing. Between major capitalization vs. repairs regulation changes and tax reform, keeping track of the correct or most-advantageous treatment of fixed asset expenditures is best left to the experts. Each year has different rules and eligibility qualifications. We track these changes and offer assistance with identifying:
- Asset types and bonus eligibility,
- Expenditures qualifying as repairs, and
- Basis in retired assets.