Hey CPAs, Do Cost Segregation Studies Benefit Your Clients? You Bet.

Written by Frances Kim. Updated Jun 17, 2019.

 CS_CPAAs a CPA, you want to provide your clients with the best service possible. Part of superior service includes saving them the most money, wherever and whenever you can. And a cost segregation study can answer that call to help discover more hidden cash. Read on to find out how.

Cost Segregation Study Advantages

1.  Increases Cash Flow
Cost segregation studies identify elements of your client’s real estate whose depreciation life can be shortened to expedite taxable income savings.

For example, commercial rental property holds a depreciation term of over 39 years. A cost segregation analysis could grant you the power to shorten portions of the property depreciation life to fifteen, seven, or five years.

Why Should a Professional Handle Your Cost Segregation Study?

With the savings that result from the abbreviated depreciation term, your clients can then invest in other areas of their business or property. The shorter the depreciation period, the more savings – and cash - for your clients.

2.  New and Established Properties Can Qualify
Cost segregation analyses are not only for in-process or newly constructed facilities. Properties that have been in service for some time can qualify for a catch-up provision. This allows your client to deduct any amount that qualified when the building was first purchased or built.

A building established after 1986 presents the most attractive options for a study. Additional deductions exist for certain properties placed into service between 2001 and 2003.

3.  Added Insurance Advantages
Increased tax savings isn’t the only reward from a cost segregation study. Your client can also save on insurance costs, too.

Information from a cost segregation analysis can help insurance underwriters better understand risks and potential costs of adverse events, such as fires and floods. This can lead to more savings for your client’s insurance premiums.

It’s a Sure Bet with a Tax Specialist

If you’re determined to help your clients boost their tax savings and in turn deliver them increased cash flow, partner with a tax specialist for cost segregation services. A cost segregation expert can help you provide superior service and ensure nothing is left to chance.



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Topics: Cost Segregation, Property Incentives

Frances Kim

Written by Frances Kim

As one of the first CTI employees, Frances has held many key positions and has played an integral role in our diversification process. With more than 10 years in customer service and management, Frances’ proven adaptability has enabled her to manage projects for clients ranging from small start-ups to Fortune 500 companies.