Cost Segregation

We have partnered with Aeon Capital Consultants a team of cost segregation engineers and specialists to provide Cost Segregation services to facilitate accurate, efficient and timely engineered cost segregation studies for your commercial real estate services.

 

  

 COST SEGREGATION DEFINED - "What We Offer"

 

Cost segregation is a strategic tax savings tool that allows property owners to increase their cash-flow by accelerating depreciation & deferring income taxes.

These cost segregation studies identify & reclassify commercial property components to shorter depreciable lives.

Engineered  cost   segregation involves a detailed analysis & reconciliation of all components to the tax basis of the property

 

 

 

  

  

Significantly increased Cash flow.

Savings can be immediately realized in Quarterly Tax Filings.

 Creates ability to retire assets and write-down book value.

    

  

Increases your property’s financial returns.
May reduce real estate property taxes.
Reduce transfer tax on purchases.
Build savings into properties you plan to construct.
Corrects misclassified assets & provides ability to “catch up” in the current year.
Benefits bank loan qualifications.
Can reduces insurance costs.
Bridges the gap between engineering, construction & accounting systems.

  

    

Time-Value of Money

The real play in Cost Segregation is in taking advantage of the time-value of money. Accelerating depreciation means taking more deductions today and fewer in the future. The value of the process is based upon the discounting of dollars with time and the ability to invest the dollars saved into additional appreciating assets. The savings realized from Cost Segregation in the first several years has allowed our mutual clients to reinvest in additional properties or investments, thus providing impressive leverage factors on the original properties.

 

A client with a $10 Million property was able to save almost $900K in taxes the first year. Cumulative year-3 savings were over $1,100K. The Net Present Value savings from our study for the full 39 Year depreciable life of the property was $796K, using a conservative 8% discount factor. Based on the client’s $2,500K cash investment in the property, we were able to provide him with an immediate 32% return on his investment with fully discounted dollars! Also, given the rate-of-return of this client’s real estate investment portfolio, an appropriately higher discount-factor has yielded an even greater ROI. The graph below illustrates this example:1

 

  

  

In an Engineering based cost segregation study, all the major components of a property are identified and valued.   Therefore, these values, singularly and collectively, may be adjusted up or down to the Basis (property value recognized by the IRS) for tax purposes. 

Non-engineered cost segregation methods, commonly referred to as “Cherry Picking”, “Residual Cost” and “Rule of Thumb”, do not meet the Internal Revenue Service's “13 Elements of Quality” requirements published in 2004, hence are at risk with respect to audit.  The following is a comparison of the cost segregation methods:

 

 

See the tax benefit that you can obtain from your commercial property with our no-cost / no obligation estimates. Our friendly and knowledgeable team will be glad to assist you. All we need is some basic information regarding your property, and our team of engineers will compare your property against our extensive database and determine a conservative estimate of the tax benefit you will achieve from our engineered cost segregation studies. We can assist you from anywhere in the United States.