Cost Segregation
Flex Tax provides specialized knowledge about cost segregation for individual components of property, which is significant when the property is acquired or constructed, and different components or asset groups have different recovery periods and placed-in-service dates.
Our professionals excel in classifying assets, analyzing their components, evaluating costs, and using cost-estimating techniques that segregate or allocate costs to individual property components. Our team will provide cost-segregation studies that result in significant tax benefits while ensuring that property costs are correct and total project costs among components are correctly classified.
Our team has more than a decade of experience helping property owners and real estate investors accelerate depreciation deductions through a cost segregation study. By identifying which building components qualify for shorter recovery periods, we help clients improve cash flow, reduce current tax liability, and plan more effectively for future capital expenditures. We work with commercial property owners, developers, and real estate investors across a range of property types, including office, retail, industrial, and multifamily buildings.
What We Offer
Our services include:
- documentation necessary to classify assets into applicable income tax property classes and recovery periods under the IRS Modified Accelerated Cost Recovery System (MACRS)
- inspection of the property, including walk-throughs
- reviews of the final purchaser closing statements, draw requests, contractor agreements, change orders and subcontractor agreements
- review of appraisal reports before and after construction of the assets for any land and other asset valuations
- allocation of soft costs between asset classes
- recovery period substantiation
- and more
Our approach follows the framework outlined in the IRS’s guidance on depreciating property (Publication 946), so every recovery period we assign is documented and defensible if your return is ever reviewed.
Cost segregation pairs well with the rest of our tax and advisory work. Learn more about our consulting services, accounting services, business advisory services, and tax preparation and compliance services, or browse our full range of services.