Cost Segregation Tax Benefit

Cost Segregation Accelerates Depreciation.

Cost Segregation identifies assets and their costs, and reclassifies them for tax purposes with a 5, 7, or 15 year depreciable lifetime, to accelerate their depreciation compared to their traditional 27.5 or 39 year depreciable lifetime.

An “engineering-based” study allows building owners to depreciate new or existing structures in the shortest amount of permissible time. This results is an immediate increase in cash flow, a reduction in current tax liability; the deferral of taxes; and the ability to reclaim “missed” depreciation from prior years (without having to amend tax returns).

Why a Specialist is Needed.

For both new and existing properties, the IRS requires engineering-based cost segregation studies be performed to realize the maximum depreciation benefits, as they provide precise segregated property information, giving CPAs the detailed supporting documentation to comply with strict IRS regulations and requirements for audit defense.

The IRS Cost Segregation Audit Techniques Guide (ATG) states “Preparation of cost segregation studies requires knowledge of both the construction process and the tax law involving property classifications for depreciation purposes. Experience in cost estimating and allocation, as well as knowledge of the applicable tax law, are other important criteria.”

We Prepare the Entire File.

Awaken’s professional partner’s engineers and CPAs will provide a (i) detailed evaluation of each system; (ii) review construction documents and specifications (if available); (iii) site visit; (iv) “detailed engineering” review of assets including mechanical and electrical systems, site improvements, etc.; (v) classification or reclassification of each building component into its appropriate tax life as prescribed by IRS guidelines.

The result is a written report with asset detail supporting all reclassification, and a complete file of all the necessary forms required to claim the deduction.

Protected by Lloyds.

Awaken, through its professional partner, has a Lloyds insurance policy that guarantees to fund any and all engineering, accounting and legal professional fees required to vigorously defend against any denial by the IRS of the Cost Segregation tax deduction.