Cost Segregation

Maximizing the Tax Benefits of Property Ownership

Cost segregation studies are part of a comprehensive tax strategy designed to help you reduce taxes through accelerated depreciation tax deductions. Cost segregation is the practice of identifying assets and their costs, and then classifying those assets for federal tax purposes. Often, how you calculate tax depreciation may significantly impact your bottom line, reduce your current federal income tax liability, and increase cash flow.

A cost segregation analysis breaks down construction and acquisition costs, and allocates them to specific categories of tangible personal property, land improvements, and real property. It often reveals costs of short-lived assets in construction or acquisition documents. Utilizing the proper balance of tax and construction knowledge, we advise clients on how to maximize the tax benefits associated with property ownership.

In one instance, the firm completed a cost segregation study for a major Rhode Island liquor distributor, accessing prior year deductions and uncovering significant assets to be included in the analysis that resulted in tax savings of several hundred thousand dollars. For another client, the firm assisted a nursing home - built on land that included some personal property - classify significant improvements and reallocate a percentage to land improvements and personal property to recognize noteworthy tax savings.

Led by Bruce Desrosiers, who co-authored book The Practice of Cost Segregation Analysis: Maximizing Tax Benefits for Building Acquisitions and Construction, our cost segregation team offers guidance for tax and accounting professionals, cost segregation consultants, facility owners, architects and general contractors on major aspects of professional, defensible cost segregation studies. With more than fifteen years of tax and cost segregation experience, Bruce is a recognized speaker on cost segregation seminars offered throughout the country.

To determine if a cost segregation study is feasible for your business, contact Bruce Desrosiers by email at bdesrosiers@SullivanCPA.com, or by phone at 401.272.5600.