What Is Cost Segregation?

Cost segregation accounting is a strategic tax planning resource that allows individuals and companies that have purchased, constructed, remodeled or expanded any form of real estate to increase their cash flow by accelerating their deductions on depreciation and deferring state and federal taxes.

When you purchase real estate, not only does the property include a building structure but also internal and external components. On average, about 20% – 40% of these components fall into a tax category that can be written off faster than the building’s main structure. A cost segregation study, therefore, dissects the purchase price or the construction cost of the property to identify these components that would otherwise have been depreciated over the normal 27.5 years for residential properties and 39 years for commercial properties. The depreciation period for these assets is much lower at 5 – 15 years and a cost segregation analysis identifies all these costs so as to free up substantial cash flow.

The Karla Dennis And Associates, Inc.â„¢ Difference

Karla Dennis And Associates, Inc.â„¢ goes beyond the traditional cost segregation study. Our unique approach to strategic cost segregation employs structural, architectural, and civil engineering knowledge and experience in tax law to identify the components in your property that qualify for accelerated tax depreciation.

Our unique blend of tax code and engineering expertise adds value to any cost segregation project. Our professionals visit buildings for inspection, study the elements and classify them accordingly. All this is documented to help with your depreciation claim.

What is the right time to conduct a cost segregation study?

Cost segregation studies can be done any time after the construction, purchase, or remodel of a property. The best time to perform this analysis for new owners, however, is within the first year of constructing, purchasing or remodeling the property. For the investors who are planning to construct or remodel a building, the best time to conduct a cost segregation analysis is before infrastructure is set. Karla Dennis And Associates, Inc.â„¢ offers preliminary analysis to determine the right time and strategy for a cost segregation study.

The Benefits of Cost Segregation

Most individuals and companies are usually surprised to discover the significant tax saving that a cost segregation analysis offers. Below are some of the most prominent benefits of the study:

From Our Blog

  • Prioritize Your Health

Prioritize Your Health with These 6 Great Strategies

November 26th, 2020|

Why is it important to prioritize your health? How can you start? This year has been especially hard on health, so the last thing we may feel like doing is prioritizing our health. Working from home and a pandemic has made it hard to prioritize your health. Health has been on everyone's mind these days, and for good reason! It's never been more important to be proactive about your [...]

  • Learn about a 529 plan

Learn 6 Easy Tips for your 529 Plan In Order to Save For College

November 19th, 2020|

What is a 529 plan? Want to save for college? Wondering why it seems that other people seem to know how to better save money? Saving for college is something that can never be started too early. Like with any savings plan, 529s represent a long-term commitment and come with things to consider, such as penalties and restric­tions. So, before opening a 529 plan, here are a few things [...]

  • Perfecting the contactless customer experience

4 Smart Tips For Perfecting The Contactless Customer Experience

November 12th, 2020|

Why are we concerned about a contactless customer experience? As concerns around public health and safety continue to rise, so does the popularity of contactless service. In fact, it's highly likely that consumers' appetite for no-­contact support will persist post-pandemic. Business owners need to take this seriously because rest assured that customers are paying attention to how your business has adapted practices and procedures to ensure their safety. Some [...]

  • Instagram Tips

6 Easy Instagram Tips for Your Business

November 5th, 2020|

6 Easy Instagram Tips For Your Business Need some easy Instagram tips for your business through COVID to keep up your business's momentum? It seems like our economy has been downstream, depending on your business. It may seem like things are not going to improve anytime soon, so what can you do? What changes can you make to keep up with our changing times? Many restaurants and shops have [...]

  • 2020 Payroll Tax Deferral

Important News Alert: 2020 Payroll Tax Deferral

October 29th, 2020|

2020 Payroll Tax Deferral Karla Dennis and Associates, Inc. is here to update you on the 2020 Payroll Tax Deferral. With all the changes happening this year, it's been a whirlwind of updates and news coming from all directions. Karla Dennis and Associates, Inc. is here to keep you updated with tax, business, and real estate news. Perhaps another vital piece of news is the 2020 Payroll Tax Deferral. [...]

  • virtual conferences tips

The 8 Best Tips to Improve Your Virtual Conference this Year!

October 22nd, 2020|

If you plan to attend a conference soon, it will likely be a virtual event. While some may dismiss virtual conferences as just sitting in front of a computer, the fact is they can be more comfortable (sweatpants, anyone?), more rewarding and every bit as enjoyable as an in-person event. Due to the pandemic of this year, it's very common for everyone to be switching to virtual conferences or [...]