Cost segregation breaks out certain non-structural components of a building and allocates shorter life classes to those components depreciating them at an accelerated rate.
A cost segregation study is an engineering-based tax analysis that allows real estate owners to accelerate the depreciation of certain assets, thereby reducing their federal and state taxable income.
The following examples illustrate the tax benefits of a cost segregation study.
Apartment Complex, Wylie, TX
Improvement / Construction Cost: $43,765,968
Cost Segregation Study Results:
5-year Property:
15-year Property:
27.5-year Property:
$10,202,240
$4,913,353
$28,650,375
23.31%
11.23%
65.46%
Storage Units, Flagstaff. AZ
Improvement / Construction Cost: $9,079,498
Cost Segregation Study Results:
5-year Property:
15-year Property:
39-year Property:
$619,851
$1,585,998
$6,873,649
6.82%
17.47%
75.71%
Office Building, West Sacramento, CA
Improvement / Construction Cost: $66,804,452
Cost Segregation Study Results:
5-year Property:
15-year Property:
39-year Property:
$10,027,582
$5,474,186
$51,302,680
15.01%
8.19%
76.80%
Plaza, Citrus Heights, CA
Improvement / Construction Cost: $10,425,405
Cost Segregation Study Results:
5-year Property:
15-year Property:
39-year Property:
$1,621,050
$2,957,754
$5,846,601
15.55%
28.37%
56.08%
Office Building, Washington, DC
Improvement / Construction Cost: $94,436,866
Cost Segregation Study Results:
5-year Property:
15-year Property:
39-year Property:
$17,307,374
$1,118,498
$76,010,994
18.33%
1.18%
80.49%
Plaza, Port Richey, FL
Improvement / Construction Cost: $2,461,110
Cost Segregation Study Results:
5-year Property:
15-year Property:
39-year Property:
$306,997
$557,824
$1,596,289
12.47%
22.67%
64.86%
Senior Apartment Complex, Provo, UT
Improvement / Construction Cost: $8,925,000
Cost Segregation Study Results:
5-year Property:
15-year Property:
27.5-year Property:
$2,555,943
$1,321,878
$5,047,179
28.64%
14.81%
56.55%
Sports Facility Suite, Rocklin, CA
Improvement / Construction Cost: $3,785,292
Cost Segregation Study Results:
5-year Property:
15-year Property:
39-year Property:
$1,639,807
$3,361
$2,142,124
43.31%
.09%
56.60%
Apartment Complex, Houston TX
Improvement / Construction Cost: $13,918,750
Cost Segregation Study Results:
5-year Property:
15-year Property:
27.5-year Property:
$3,912,676
$1,734,750
$8,271,324
28.11%
12.46%
59.43%
Veterinary Hospital, Reno, NV
Improvement / Construction Cost: $691,454
Cost Segregation Study Results:
5-year Property:
15-year Property:
39-year Property:
$256,984
$93,677
$340,793
37.17%
13.55%
49.28%
Office / Warehouse's, 3 Buildings, Sacramento, CA
Improvement / Construction Cost: $25,488,704
Cost Segregation Study Results:
5-year Property:
15-year Property:
39-year Property:
$2,729,103
$3,838,908
$18,920,693
10.71%
15.06%
74.23%