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Cost Segregation

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What is Cost Segregation?

Cost Segregation is the analysis of commercial construction in the effort to segregate real property from personal property, in order to accelerate depreciation deductions.

Who can benefit from a Cost Segregation Study?

Any for profit organization that is designing, building, purchasing or renovating a commercial facility. Generally the more customized the building, the greater the tax benefit that can be derived.

What is the benefit of Cost Segregation?

By segregating the cost of construction as personal property, depreciable lives can be decreased from 39 years to a lower asset life, such as 15 or 7. Accelerating depreciation saves taxes and increases current cash flow.

When is a Cost Segregation study performed?

Generally a cost segregation study can be performed in three ways:

  1. The study can be started during the initial design of the structure. This would allow for specific items to be designed to provide for lower depreciable lives. The cost segregation specialists would work with the engineers and the architects during the design phase.
  2. The study can be performed during the construction phase or the post construction phase. The cost segregation specialists would work with the owner of the building and the general contractor to obtain specific invoice information that would allow for efficient segregation of costs.
  3. The study can be performed on a newly acquired facility that was built in prior years. The cost segregation specialists would work with engineers and estimators to segregate the depreciable acquisition costs of the building.

Interested in learning more about a Cost Segregation Study?

Name Phone E-mail
Steven A. Julian, CPA 802 651-7224 Steve Julian
Michael S. Keller, CPA 802 651-7225 Michael Keller
Richard G. Wolfish, CPA 802 651-7233 Richard Wolfish

Get in touch with Gallagher, Flynn & Company, LLP

725 Community Drive, Suite 401, South Burlington, VT 05403
Call Us: (802) 863-1331 • Fax: (802) 651-7305