What It Is:  

• Enables businesses to achieve the highest levels of federal tax depreciation to be claimed on facilities whether they are newly constructed or acquired.  
• Provides an accurate allocation of construction costs to the underlying assets in such a manner as to provide for more rapid depreciation of certain fixtures while also generating the appropriate property tax cost allocations.  These assets include elements that are not structural components of buildings.

How It Benefits the Client:  

• Allows the company to take advantage of the accelerated depreciation applicable to certain fixtures and related assets.  The cost basis of those assets will be recovered through depreciation and amortization over a shorter period of time, thus generating current tax benefits.  
• Provides a more accurate representation of the property tax basis to be used in the property tax reporting and assessment process.
• Assigns cost to the assets which are allowed a shorter depreciable recovery period under the tax law.  Depending on effective tax rates, a 20 percent savings is generated on every dollar that is allocated to a seven-year asset instead of depreciable realty.  The tax savings resulting from cost segregation can range from a small amount to hundreds of thousands of dollars.
• Can be performed on facilities placed in service in prior years without the need to amend past tax returns.  
• Increased depreciation in the early years of ownership resulting in increased tax savings and more available cash flow.
• A proposal identifying the estimated tax savings to be realized the first year, the net present value of the tax savings over the remaining life of the facility, and the professional fees associated with performing the analysis will be provided.
• The fees are not contingency-based, but are based on the hours required to do the work.  A benefit-to-cost rationale within the proposal ensures a multiple of the fees in tax savings the very first year.  The positions taken with respect to property classifications are well documented and supported in the report provided as part of the study.  As a result, what will be clear is the magnitude of the tax savings potentially resulting from the analysis.  
• Cost segregation exists because of changes in U.S. tax laws; therefore, these facility studies have been examined by the IRS and have withstood the agency’s scrutiny.