Cost Segregation

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Cost segregation services offer companies the opportunity to maximize tax depreciation benefits related to the construction or acquisition of real estate and minimize the risk of audit exposure.

Duff & Phelps' Real Estate Advisory Group offers specialized expertise to meet companies' cost segregation needs. We examine properties, identify qualified personal property costs and classify those costs into the appropriate MACRS recovery period. The firm's cost segregation services yields benefits such as reduced individual and corporate taxes or reduced property tax. Types of real property that should be considered for a cost segregation study include hotels, resorts, shopping centers, supermarkets, manufacturing facilities, golf courses, office buildings, warehouses, biotech and pharmaceutical facilities and many other types of buildings.

By understanding the subtleties and intricacies of the procedures, we can help uncover deductions where companies may not have known they existed.

Cost segregation studies are typically implemented in cases involving the construction of a new facility, acquisition of existing real estate or renovation, enhancement or leasehold improvement of an existing facility.
 
In addition to newly constructed or acquired facilities, instances of existing properties to which a cost segregation study was never applied may also contain additional tax depreciation benefits. Under various revenue procedures, taxpayers are allowed to reclassify the depreciable lives of certain building components and pick up previously unclaimed depreciation deductions.

Cost Segregation services include:

  • Reducing individual and corporate income taxes
  • Reducing real estate taxes
  • Reducing personal property taxes
  • Allowing "catch-up" depreciation on misclassified assets
  • Realizing after-tax benefits with older buildings
  • Providing audit support in the event of IRS queries
  • Offering a competitive fee structure
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