Cost Segregation – What You Need to Know
COST SEGREGATION
Is an IRS APPROVED Method to reduce or eliminate federal income taxes.
We provide cost segregation reporting for federal income tax reduction by calculating costs of property components and segregating each to the correct depreciation lives, including short-life classifications. Shorter depreciation time lowers taxable income.
Why Do a Cost Segregation Study?
- Increase in cash flow
- Reduce current tax liability
- Defer Federal Income Taxes
- Ability to recapture under-reported depreciation from past years
- Tax-Free Wealth Opportunities Exist
Beyond the benefits of enhanced cash flow, a quality cost segregation analysis can be a key component in keeping you compliant with IRS regulations.
OUR APPROACH
- Consultation
- Preliminary Analysis of approximate tax savings
- Firm Quote To Proceed?
Cost Depreciation Approach Engineering Based Approach to Cost Segregation
Shore utilizes an engineering based approach to our studies which is the IRS preferred methodology. Our team will interface with you to answer all of your questions about cost segregation depreciation approach, and will assist you in determining if a cost segregation study will be of benefit to you. One of the key components in this process is a preliminary estimate of potential benefits.
Shore Provides at no charge and with no obligation, a preliminary analysis that will estimate approximate savings for your asset, based on studies previously completed on similar assets.
These results will include a firm cost quote, allowing you to project a payback ratio of savings versus study cost prior to making any commitment to continue.
Once the decision to proceed has been made, Shore will work closely with you and/or your CPA or financial/tax manager to collect existing data and documents regarding the subject property. To prepare your report, an appraiser inspects the property, identifies eligible items, then calculates their value and distributes each to its correct depreciation life, according to IRS rules and Federal Tax Court’s decisions.
A final report is then issued, providing detailed cost allocations for the individual 5, 7 and/or 15 year classifications, along with the 39 or 27.5 year classifications. The latter are broken out into the nine “units of property” called out in the 2014 IRS Tangible Property Regulations.
- First we seek to understand your needs and magnitude of tax pain and review properties available for cost segregation. Our team will answer all of your questions about tax planning & cost segregation and will assist you in determining if a cost segregation study will be of benefit to you.
- One of the key components in this process is a preliminary estimate of potential benefits. Shore will provide, at no charge and with no obligation, a preliminary analysis that will estimate approximate savings for your asset based on studies previously completed on similar assets. ]
- Firm cost quote, allowing you to project a payback ratio of savings versus study cost prior to making any commitment to continue.
Our studies are a key component in keeping you IRS compliant!
We can help you on assets you have owned for years! “Catch-Up” (C-U) studies allow you to claim previously under-reported depreciation from prior years without filing any amended tax returns!