A cost segregation study is a detailed analysis of the components of a building and its surrounding land, with the goal of identifying and reclassifying certain property as personal property. This reclassification allows the property owner to take accelerated depreciation deductions on the personal property, which can result in significant tax savings.
A review of the building’s construction, including the architectural and engineering plans, as well as a physical inspection of the property. A Cost Segregation study will typically identify and reclassify items such as lighting fixtures, flooring, wall coverings, and certain equipment as personal property and is typically conducted by a specialist, such as a tax attorney or an engineer, who has expertise in tax laws, engineering, and construction. The specialist will use this expertise to identify and reclassify property in accordance with IRS guidelines.
Depreciated over 39 years for non-residential properties or 27.5 years for residential rental properties.
Depreciated over 5, 7, or 15 years, depending on the type of asset.
Usually depreciated over 15 years.
Cost Segregation studies can be extremely beneficial to real estate owners to help identify and claim as many tax credits as possible to maximize tax savings. A Cost Segregation study can net you around 30% of your real estate’s income in tax deductions – on a million-dollar purchase, that’s potentially $300,000 in tax savings.
Cost Segregation studies require multiple trained experts in mechanical engineering, architectural engineering, and a CPA to do a cost segregation study.
Here at The Mewes Group, we take care of all of that for you. We combine architectural engineering with accounting and put together a study that creates massive savings.
Our in-house legal team remains up to date on the ever-changing red tape set by the IRS & Congress, so you don’t have to.
In March of 2020 at the outset of the pandemic, we had the opportunity to participate on a call with the White House regarding covid business relief programs. It quickly became quite apparent the size and complexity of these programs, and that business owners were going to be left on their own to figure out these programs. It is our mission to aid business owners to successfully navigate these programs, legally and ethically.
We specialize in tax credits and government incentives. Our sole focus is to help you take advantage of complex government programs like the ERC, Real Estate Cost Studies, R&D Credits, and other credits.