Cost Segregation

A A Cost Segregation Study is one of the most valuable tax planning strategies available to commercial real estate owners

today. At Epic Results, we understand our clients needs for cash in hand today rather than a later date. Our Cost Segregation

Study team focuses on maximizing tax savings and increasing cash flows for commercial real estate owners.

What is Cost Segregation?

A Cost Segregation Study is a strategic tax savings' tool that allows commercial real estate owners who have constructed,

purchased, acquired or remodeled real estate to increase their cash flow by accelerating depreciation deductions and

deferring their federal and state income taxes and possibly reducing their real property taxes. A Cost Segregation Study

allows taxpayers to pull out different components of the total building costs by converting those components from real

property into personal property which enables them to utilize much shorter depreciable lives.

What types of properties qualify for a Cost Segregation Study?

All properties constructed or acquired after 1986 valued over $750,000 or have undergone leasehold improvements over

$350,000, such as car dealerships, office buildings, apartment buildings, Hotels, Restaurants and many others qualify for

cost segregation and or ‘catch-up’ depreciation. The property owner must also have a taxable income and plans on holding

the property for at least two years in order to make the study cost effective.

What is involved in a Cost Segregation Study?

During a Cost Segregation Study a cost segregation engineer will tour the property taking detailed notes and photographs,

review plans (if available) review construction information such as, construction bills and change orders, AIA documents to

identify and segregate the items that qualify for accelerated depreciation. These items will be allocated from the building

cost info fixtures, equipment and land improvements. If review plans are unavailable our team will implement cost estimating

procedures to maximize your accelerated depreciation deductions. We will also conduct extensive research on case law and

and revenue rulings related to your particular property in order to support our findings.

Example

$10 million office building, placed into service 10 years ago

Original depreciation method: 39-year straight line

Reclassified Amount with Cost Segregation Study:

5-year property- $1 million

15-year property- $1.5 million

Example Section 481(a) adjustment calculation and resulting tax benefit:

Depreciation reported previously $ 2,564,100

Cost Segregation Depreciation $ 3,923,070

Section 481(a) Adjustment $(1,358,970)

Tax Rate 35%

Tax Benefit in Year of Study $ 475,640

Why Epic Results?

We are a multi-faceted business consulting firm at the fore-front of offering Cost Segregation Services to commercial property

owners nationwide. Through our strategic partnerships, we have performed 100's of Cost Segregation Studies nationwide.

Our accountants, engineers and construction specialists posses the tax expertise needed to perform Cost Segregation. We

offer prospective clients a no-cost preliminary study of their property to determine their estimated tax savings.

Partnering

If you are a CPA, property manager, appraiser, contractor, commercial property broker or you have clients that could benefit

from cost segregation, we would like to partner with you to offer Cost Segregation to your clients. We would like to work with

you in the way that would be best for your firm. We want you to feel comfortable working with us and would be happy to work

together any way you see fit. Whether it be on a referral bases or having you control the client relationship and we will do all the

work behind the scenes.