Cost Segregation and Fixed Asset Review Services
Proper Cost Classification Advantages
- Maximize current deductions by way of accelerated depreciation
- Recognize lower tax burdens
- Optimize after-tax cash flow
Learn how you can benefit from SC&H Group’s Cost Segregation and Fixed Asset Review Services. Contact us or call (888) 960-7569.
Increase Capital Options & Flexibility
Buildings are considered long term assets. Accordingly, their associated depreciation expense is normally recognized over longer periods – from 27 to 39 years.
Cost Segregation Studies (CSS) successfully allow real property owners to reclassify certain costs out of these longer life assets and into shorter life assets. The tax effect is to accelerate deductions into early years, thereby reducing tax liabilities for owners.
Building acquisitions, renovations, expansions, and new construction are all good CSS candidates. CSS can even be prepared years afterwards, allowing a “catch up” of savings. By identifying and separating personal property assets from real property assets, owners can take advantage of substantial tax savings and depreciation deductions associated with fixed assets and related costs.
Defer tax liabilities and optimize near term cash flow by separating building components into proper asset classifications and recovery periods.
Correct improper taxation of fixed assets and expedite tax deductions or deferrals. Mitigate non-compliance and IRS audit risk with appropriate fixed asset capitalization.
Develop maximum tax deductions on real and personal property purchases. Timely reviews can unlock deductions from prior years, even those beyond the statute of limitations. Also, improve cash flow related to capital expenditures in the current and future years.
Example Of Success
A multibillion dollar manufacturing company’s distribution center was renovated and upgraded. Following an SC&H Group Cost Segregation and Fixed Asset Review analysis, $3.7 million in real property was reclassified from a 39-year useful life, down to 15, 7, and 5 year useful lives for tax purposes. Resulting net present value savings totaled $600,000. The study generated additional depreciation deductions of $2.5 million in the first 5 years.
Our team of experts can help you unlock similar value tied up in your property assets. Cost segregation and fixed asset review processes can include:
- Tax depreciation schedule review
- Shorter tax recovery period determination
- Identification & classification of all construction/purchase/renovation costs
- Facility inspection to understand asset use
- Construction drawings review
- IRS repair regulations compliance
- A foundation to make future capitalization decisions easier under the new tangible property rules.
While fully versed in federal, state, and local tax codes, SC&H Group brings a business centered mindset to each engagement. We have been engaged by developers, owner-occupied properties, and REITs nationwide, and have performed cost segregation and fixed asset review studies on real property assets totaling over $5 billion.
Several of our tax professionals held Tax Director positions at large multinational corporations. This unique mix of experience and knowledge allows your enterprise to leverage every opportunity leading to exceptional results.
Due to our commitment to quality, excellence, and fidelity, SC&H Group enjoys one of the industry’s leading client retention rates. We become a viable part of your team where strategy, planning, and goals are intimately aligned.