Cost segregation studies are specific engagements conducted by tax experts to maximize the tax benefit of real estate ownership by identifying, segregating and classifying a building's components to asset categories with the shortest possible life to create significant tax deductions sooner for federal and state income tax purposes. Application of the findings from these studies can lead to substantial reductions in current taxable income for clients by accelerating depreciation, and thereby increase cash flows. In addition to improving tax liabilities generated by recently purchased or constructed properties, a cost segregation analysis can produce substantial tax benefits for properties that have already been depreciated for as many as 10 years or more by catching up on missed depreciation. This description may be from another edition of this product.
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