Cost Segregation Studies

Faster depreciation can lead to significant tax savings, because traditional accounting will not capture the full range of assets that qualify for short lives under the tax law.

What is a cost segregation study?

A cost segregation study identifies building assets which can be depreciated at an accelerated rate using a shorter depreciation life. These assets may be part of newly constructed buildings or existing buildings that have been purchased or renovated.

If the expense of the construction, purchase, or renovation was in a previous year, favorable IRS rulings allow taxpayers to complete a cost segregation study on a past acquisition or improvement, and take the current year’s deduction for the resulting accelerated depreciation not claimed in prior years.

What's on your mind?

In managing fixed assets, your challenges are to:

  • Reduce your income tax by maximizing your deductions
  • Improve cash flow
  • Stay up to date with changing tax laws
  • Provide comprehensive accounting records and IRS documentation

A unique approach

CliftonLarsonAllen performs each study with a combined tax and engineering perspective. Our services include:

  • A comprehensive review by our engineering staff of your construction invoices and building plans to maximize the allocation of five, seven, and 15 year assets
  • An on-site inspection of the building to accumulate additional facts for the study — including photos of the building’s exterior and interior
  • Appropriate allocation of all indirect (i.e., soft) construction costs, which are easily overlooked
  • Final reports that provide easy-to-use data for your tax planning

Cost segregation services

Almost every business can benefit from a cost segregation study. Talk to us about your real estate investments, and we’ll give you an assessment to help determine if a cost segregation study is right for you.

Our cost segregation studies have reduced our clients’ taxes on a range of buildings, including:

  • Offices
  • Retail stores and shopping centers
  • Manufacturing plants
  • Distribution warehouses
  • Hotels
  • Auto dealerships
  • Research and development facilities
  • Agriculture and biofuel production facilities
  • Restaurants
  • Medical facilities
  • Data centers
  • Apartment complexes
  • High-tech facilities
  • Banks