Cost Segregation

Few taxpayers, whether business or individual, want to pay more in taxes than is absolutely required.

Tax savings help companies leverage financial resources towards essential business activities like new product/service development, organizational growth or process improvement. For this reason, reducing tax liabilities is an essential goal for business managers and owners; however, it can be challenging to find a way to make a significant impact in tax savings.

The good news is that qualifying companies can conduct a cost segregation study which can achieve this effect. Companies that recently purchased, developed or have made leasehold improvements can qualify for this study. ​

What is a Cost Segregation Study?

A cost segregation study identifies the assets and costs of your commercial real estate or construction project and classifies them for Federal tax purposes. Traditionally, most will classify assets (electrical, mechanical and plumbing features) on a 39-year depreciable life schedule providing a consistent tax benefit. However, through a cost segregation study, these same assets are re-classified with a 5-, 7- or 15-year depreciable life schedule using accelerated methods.

THE PROCESS
H2R CPA conducts a thorough investigation of your project relying on a team of accounting, construction and engineering professionals to identify and reclassify assets as permitted. Our professionals follow the IRS approved cost segregation process allowing us to find the shortest depreciation schedule for assets.

Our process includes:

  • Review of Architectural Blueprints
  • On-site Inspections and Reviews
  • Identification of Assets Qualifying for Reclassification
  • Creation of Detailed Asset Descriptions & Functions
  • Documentation of Assets Available for Reclassification
  • Summary Meeting with Stakeholders
  • Report Preparation

Contact Us

Cost segregation studies are a popular method for commercial and other real estate companies to achieve significant tax savings. If your company is considering purchasing property or has concluded a transaction in recent months, then H2R CPA can help with a study. For additional information, call 412-391-2920 or use our Contact Us form.

Meet Our Tax Leadership Team

William M. Bodnar

CPA, MST, Tax Director

Paul K. Rudoy

CPA/PFS, Managing Partner