"Adjust the timing of depreciation deductions to maximize tax savings"

A Cost Segregation Study is important because the federal government has increased the tax life of most commercial building to 39 years. The tax life on equipment and land improvements, however, is unchanged and can very from 5 to 15 years. With the spread between the categories increasing, it's more important to identify any items that can be properly classified in a category with shorter tax life.

A Cost Segregation Study will help you classify assets as eligible for the shortest appropriate depreciable lives. This, in turn, speeds up depreciation deductions and decreased taxable income. As a taxpayer, you pay less income tax during the early stages of a building's life.

"Reduce other tax liabilities to increase cash flow"

Besides reducing income tax liabilities by accelerating depreciation expense, you may be able to reduce other tax costs.

"Reduce real estate tax liabilities"

Real estate taxes can be reduced by separating tangible personal property from the nonresidential real property being, or already, constructed. Even if a jurisdiction imposes a personal property tax on business personal property, tax savings will be realized due to substantially shorter personal property lives, and faster devaluation worth.

"Reduce initial cash outlay by taking advantages of specific sales tax exemptions"

Substantial sales tax savings may be achieved by classifying tangible personal property as industrial machinery and equipment. Many states provide a sales tax exemption to a company purchasing qualifying machinery, equipment, and supporting systems. As a result of a Cost Segregation Study, certain assets may be reclassified from a building structure to exempt industrial machinery or equipment. Immediate cash savings may be realized.