Cost Segregation 

Make your real estate investments work for you sooner rather than later.

Cost segregation is a commonly used tax planning strategy and a smart way to increase cash flow by accelerating the depreciation of commercial building costs.

A quality engineering-based cost segregation study from Tri-Merit allows building owners to write off their building (new and existing) in the shortest amount of time permissible under current tax laws. The favorable depreciation rules contained in the Tax Cuts & Jobs Act (TCJA) create incentives for the greater use of cost segregation studies.

It’s important to work with a partner that has the right experience and can deliver a quality study that meets all IRS guidelines—a partner like Tri-Merit.

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How does a quality cost segregation study reduce tax liability?

A building is commonly depreciated over the 39 or 27.5-year life assigned to real property. Cost segregation studies identify and reclassify components such as electrical, plumbing, mechanical and finishes into 5, 7, and 15-year property. This reduces the building owners tax liability in the near-term.

A quality cost segregation study is a tremendous tax planning technique for businesses who own their own building or who have recently acquired a new property.

 

What types of commercial properties qualify for a cost segregation study?

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New construction

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Leasehold improvements

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Buildings valued above $500,000 (excluding land)

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Real property stepped up through estate

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Purchase of existing property, renovations or expansions

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Existing property placed in service after January 1, 2000

property type chart
This chart illustrates the typical percentage of a property that can be reallocated from real property into the shorter-life personal property asset classes based on property type.

When quality counts, Tri-Merit cost segregation studies deliver.

According to the IRS, the preparation of a cost segregation study requires knowledge of both the construction process and the tax law involving property classifications for depreciation purposes.

Choosing a preparer based on their credentials and level of expertise can have a bearing on the overall accuracy and quality of a study. This is why so many CPAs and CFOs trust Tri-Merit to deliver a quality cost segregation study that will hold up against the most stringent IRS audit.

By coding standard IRS requirements and conducting site inspections, you are guaranteed a comprehensive work paper file and supporting documentation with every study. Documentation often includes civil/site work, structural, architectural, plumbing, electrical and HVA. When quality counts, Tri-Merit delivers.

Ready to learn more? We’re here for you.