Cost Segregation

Engineering Cost Segregation is an IRS approved tax strategy by which commercial property owners can Increase Cash Flow by classifying the elements of a property into their appropriate useful life categories.  Segregating a property into the correct 5, 7, 15, 27.5 and 39 year categories enables a larger portion of the building to be depreciated at the beginning of its useful life, as opposed to equally over 39 years. NAI Signature Group performs cost segregation studies to help its clients take advantage of this less known and under-utilized strategy.

Benefits of Cost Segregation

  • Reduce current federal and state tax liabilities
  • Write-off building components that need replacement
  • Correct misclassified assets and receive "catch-up" benefits

 Depreciation Categories

  • Personal Property
    • Carpeting, Kitchen, Certain Fixtures, Interior Walls
    • 5/7 Year Depreciation
    • Double declining method
  • Land Improvements
    • Sidewalks, Fences, Landscaping
    • 15 Year Depreciation
    • 150% declining balance
  • Structural
    • Load-bearing Walls, Ceilings, Floors
    • 39 Year Depreciation (27.5 for multi-family)
    • Straight Line

 Typical Study Cost

5:1 to 15:1 Return on Investment