Who Qualifies
Who Qualifies
If You Own Investment Property, You May Qualify
Cost segregation services are primarily designed for individuals and businesses that own or invest in commercial or residential real estate. Any property owned for a business purpose can qualify.
Commercial Property Owners
Owners of commercial real estate, including office buildings, warehouses, retail spaces, hotels, manufacturing facilities, and multifamily properties, can benefit from cost segregation. The larger the property’s value, the more significant the potential tax savings.
Real Estate Investors
Real Estate Developers
Developers who construct new commercial properties or renovate existing ones can utilize cost segregation to maximize depreciation deductions and enhance the financial viability of their projects.
Business Owners with Real Estate Holdings
Businesses that own or lease commercial real estate as part of their operations can benefit from cost segregation services. This includes businesses in hospitality, manufacturing, retail, and more.
Passive Investors in Real Estate
Passive investors in real estate partnerships, limited liability companies (LLCs), or real estate investment trusts (REITs) may also benefit from cost segregation studies conducted by the entity owning the real estate.
Property Managers
Property management companies responsible for the maintenance and operation of commercial properties may find cost segregation services valuable for optimizing tax deductions and providing enhanced financial reporting to property owners.
Taxpayers with Significant Real Estate Holdings
Individuals or entities with a substantial commercial or residential real estate portfolio can use cost segregation as a strategic tax planning tool to reduce current income tax liabilities and increase cash flow.
Is Cost Segregation Right for You?
Every Property Deserves a Closer Look
It’s important to note that while cost segregation can be highly beneficial for many commercial property owners and investors, its applicability depends on factors such as the property’s type, size, and value. Additionally, cost segregation studies must comply with IRS guidelines to ensure that the reclassification of assets and depreciation schedules are legitimate and supportable.
Before pursuing cost segregation services, it’s advisable to consult with tax professionals or cost segregation experts who can assess your specific situation and determine the potential benefits and eligibility for cost segregation.
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Case Study
Medical Office Building in Los Angeles, CA First Year Increased Depreciation $1.01M
Facility: Medical / Surgical Center
Location: Los Angeles, CA
Size: 10,000 SF
Property: 1.5 Acres
Building Basis: $2.9M