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Cost Segregation

Tax

We’re committed to relieving the tax burdens of businesses, individuals, and families. With a careful assessment of your situation, our tax professionals develop a uniquely customized strategy for your tax planning needs with the objective of minimizing your tax liability.

SURVEY SAYS…UNDERSTANDING TAX REFORM IS BIGGEST TAX CHALLENGE FOR MIDDLE MARKET BUSINESSES

According to the UHY 2022 Middle Market Trends Survey, middle market business owners say their three biggest tax challenges were understanding tax reform, finding ways to reduce taxable income and navigating complex state nexus requirements. 

Our experienced tax professionals are constantly sending out information on new tax legislation and other important tax items, and specialize in minimizing tax liability and preserving wealth. We utilize cutting edge tax strategies to reduce taxable income and position business owners for success. 

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What We Offer

A cost segregation study can reduce your tax liability and increase cash flow.

If you have expanded or performed tenant improvements on a commercial real estate property, or have an existing, recently acquired, newly constructed or renovated property, a cost segregation study could be your next tax savings tool!

What is a cost segregation study? 

A cost segregation study is a tax savings tool that allows commercial real estate owners to maximize their depreciation expense by reclassifying assets into shorter recovery lives.

A commercial property is typically depreciated over a 27.5-year (residential), or 39-year (non-residential) recovery period. A cost segregation professional identifies personal property assets such as specialty finishes, millwork, specialty electrical, plumbing and mechanical items, and land improvements that can be reclassified into 5-, 7-, or 15-year property.

On average, a study reclassifies 20-40% of the depreciable basis costs. With the application of a study, assets which qualify as 5-,7-, and 15-year recovery period increase current year depreciation expense, reducing tax liability and increasing cash flow. This allows you to invest this savings into your business.

Bonus depreciation

Cost segregation studies are more beneficial now more than ever with the application of bonus depreciation. Under the Tax Cuts and Jobs Act (TCJA), assets placed into service after September 28, 2017, with a Modified Accelerated Cost Recovery System class life of 20 years or less are eligible for 100% bonus depreciation through December 31, 2022. Bonus depreciation rates will decline by 20% each year thereafter.

Assets qualifying for 100% bonus depreciation are fully deductible in the first year, increasing current year depreciation expense, as well as maximizing tax benefits.

Qualified improvement property

Another provision of the TCJA can be applied if you own a property which has been improved. Properties which have interior improvements made to an already existing building structure may have additional assets that would typically be depreciated over a 39-year recovery life, now qualify to be reclassified as 15-year qualified improvement property (QIP).

Examples of assets that qualify as 15-year QIP include interior finishes, interior doors, electrical systems, plumbing systems, and interior HVAC components. In addition, the 15-year QIP assets qualify for 100% bonus depreciation treatment and are fully deductible in the first year.

While the average results of a standard cost segregation study reclassify 20-40% of the depreciable cost basis, a renovated property that qualifies for QIP assets can reclassify up to 100% of the renovation costs. Any improvements made to the exterior structure of the building such as siding, exterior doors, roof systems, and exterior HVAC equipment will not qualify for 15-year QIP treatment.

Applications

Industries that could benefit from a study include, but are not limited to: multi-family residential homes, hotels, assisted living, retail shopping centers, grocery stores, light-industrial, manufacturing, warehouse, shipping centers, self-storage, restaurants, auto-body dealerships, auto-body repair shops, business and medical office suites, specialty medical facilities, hospitals, veterinary clinics, dry cleaners, and child daycare facilities.

Cost segregation studies can be beneficial to projects big and small in building size and in cost. An estimate of benefit can help determine if a cost segregation study is the right choice for the property.

OUR PROFESSIONALS

GREGORY PEARSON

Principal, UHY Advisors
St. Louis, Missouri

GREGORY PEARSON

Principal, UHY Advisors

SUZANNE MULDOON

Principal, UHY Advisors
Hudson, New York

SUZANNE MULDOON

Principal, UHY Advisors

MATTHEW MUNN

Partner, UHY LLP
Managing Director, UHY Advisors
Sterling Heights, Michigan

MATTHEW MUNN

Partner, UHY LLP
Managing Director, UHY Advisors

MATT MARTINA

Managing Director, UHY Advisors
Houston, Texas

MATT MARTINA

Managing Director, UHY Advisors

ROBERT LICKWAR

Partner, UHY LLP
Managing Director, UHY Advisors
Farmington, Connecticut

ROBERT LICKWAR

Partner, UHY LLP
Managing Director, UHY Advisors

N. THÉRÈSE WOLFE

Principal, UHY Advisors
Hudson, New York

N. THÉRÈSE WOLFE

Principal, UHY Advisors

VENUS WU

Principal, UHY LLP
New York, New York

VENUS WU

Principal, UHY LLP

TODD KELLEY

Managing Director, UHY Advisors
Ann Arbor, Michigan

TODD KELLEY

Managing Director, UHY Advisors

PATRICK GREGORY

Partner, UHY LLP
Managing Director, UHY Advisors
Farmington Hills, Michigan

PATRICK GREGORY

Partner, UHY LLP
Managing Director, UHY Advisors

BRADLEY CUMMINGS

Partner, UHY LLP
Managing Director, UHY Advisors
Catskill, New York

BRADLEY CUMMINGS

Partner, UHY LLP
Managing Director, UHY Advisors

GORDON FOLLMER

Partner, UHY LLP
Managing Director, UHY Advisors
Farmington Hills, Michigan

GORDON FOLLMER

Partner, UHY LLP
Managing Director, UHY Advisors

HERBERT GEARY, III

Partner, UHY LLP
Managing Director, UHY Advisors
Salisbury, Maryland

HERBERT GEARY, III

Partner, UHY LLP
Managing Director, UHY Advisors

BILL SUTTON

Principal, UHY Advisors
St. Louis, Missouri

BILL SUTTON

Principal, UHY Advisors

THOMAS CALLAN

Great Lakes Regional Managing Director, UHY Advisors
Farmington Hills, Michigan

THOMAS CALLAN

Great Lakes Regional Managing Director, UHY Advisors

JIE CHEN

Principal, UHY Advisors
New York, New York

JIE CHEN

Principal, UHY Advisors

JOHN GALLO

Partner, UHY LLP
Managing Director, UHY Advisors
Farmington Hills, Michigan

JOHN GALLO

Partner, UHY LLP
Managing Director, UHY Advisors

ROY GEISER

Partner, UHY LLP
Managing Director, UHY Advisors
Salisbury, Maryland

ROY GEISER

Partner, UHY LLP
Managing Director, UHY Advisors

CHUCK SOCKETT

Partner, UHY LLP
Managing Director, UHY Advisors
New York, New York

CHUCK SOCKETT

Partner, UHY LLP
Managing Director, UHY Advisors

DENISE PISCIOTTA

Partner, UHY LLP
Managing Director, UHY Advisors
St. Louis, Missouri

DENISE PISCIOTTA

Partner, UHY LLP
Managing Director, UHY Advisors

SCOTT VENTLINE

Principal, UHY LLP
Detroit, Michigan

SCOTT VENTLINE

Principal, UHY LLP

DAVID HOUSTON

Principal, UHY Advisors
Columbia, Maryland

DAVID HOUSTON

Principal, UHY Advisors

MICHAEL ZMOROD

Principal, UHY Advisors
New York City, New York

MICHAEL ZMOROD

Principal, UHY Advisors

COREY MASSELLA

Partner, UHY LLP
Managing Director, UHY Advisors
New York, New York

COREY MASSELLA

Partner, UHY LLP
Managing Director, UHY Advisors

GINA JAMES

Partner, UHY LLP
Managing Director, UHY Advisors
Kansas City, Missouri

GINA JAMES

Partner, UHY LLP
Managing Director, UHY Advisors

RALPH ZERBONIA

Principal, UHY Advisors
Farmington Hills, Michigan

RALPH ZERBONIA

Principal, UHY Advisors

DANIEL ENSOR

Principal, UHY LLP
Salisbury, Maryland

DANIEL ENSOR

Principal, UHY LLP

LAUREN OUIMET

Principal, UHY Advisors Inc.
Saratoga Springs, New York

LAUREN OUIMET

Principal, UHY Advisors Inc.

F. MICHAEL ZOVISTOSKI

Partner, UHY LLP
Managing Director, UHY Advisors
Albany, New York

F. MICHAEL ZOVISTOSKI

Partner, UHY LLP
Managing Director, UHY Advisors

MICHAEL TURNBULL

Partner, UHY LLP
Managing Director, UHY Advisors
Port Huron, Michigan

MICHAEL TURNBULL

Partner, UHY LLP
Managing Director, UHY Advisors

MEHMET UGUR

Principal, UHY Advisors, Inc.
Houston, Texas

MEHMET UGUR

Principal, UHY Advisors, Inc.

LARRY SILVERSTEIN

Principal, UHY Advisors
Columbia, Maryland

LARRY SILVERSTEIN

Principal, UHY Advisors

PAMELA MAY

Partner, UHY LLP
Managing Director, UHY Advisors
Sterling Heights, MI

PAMELA MAY

Partner, UHY LLP
Managing Director, UHY Advisors

NEHA NATHWANI

Principal, UHY Advisors
Farmington, Connecticut

NEHA NATHWANI

Principal, UHY Advisors

STEVE GOESTENKORS

Partner, UHY LLP
Managing Director, UHY Advisors
St. Louis, Missouri

STEVE GOESTENKORS

Partner, UHY LLP
Managing Director, UHY Advisors

MARC RUBIN

Partner, UHY LLP
Managing Director, UHY Advisors
Columbia, Maryland

MARC RUBIN

Partner, UHY LLP
Managing Director, UHY Advisors

RICHARD KOSKEY

Principal, UHY Advisors
Hudson, New York

RICHARD KOSKEY

Principal, UHY Advisors

ROBERT POTTER

Partner, UHY LLP
Managing Director, UHY Advisors
Farmington Hills, Michigan

ROBERT POTTER

Partner, UHY LLP
Managing Director, UHY Advisors

SHELLEY ROMANO

Principal, UHY Advisors
Columbia, Maryland

SHELLEY ROMANO

Principal, UHY Advisors

DENNIS PETRI

Partner, UHY LLP
Managing Director, UHY Advisors
Sterling Heights, Michigan

DENNIS PETRI

Partner, UHY LLP
Managing Director, UHY Advisors

PAUL TRUBER

Managing Director, UHY Advisors
Partner, UHY LLP
St. Louis, Missouri

PAUL TRUBER

Managing Director, UHY Advisors
Partner, UHY LLP

RALPH MIRANDO

Partner, UHY LLP
Managing Director, UHY Advisors
New York, New York

RALPH MIRANDO

Partner, UHY LLP
Managing Director, UHY Advisors

HAROLD MOHN JR.

Mid-Atlantic Regional Managing Director, UHY Advisors
Columbia, Maryland

HAROLD MOHN JR.

Mid-Atlantic Regional Managing Director, UHY Advisors

ROBERT BAUER

Partner, UHY LLP
Managing Director, UHY Advisors
St. Louis, Missouri

ROBERT BAUER

Partner, UHY LLP
Managing Director, UHY Advisors

TODD BENSLEY

Partner, UHY LLP
Managing Director, UHY Advisors
Sterling Heights, Michigan

TODD BENSLEY

Partner, UHY LLP
Managing Director, UHY Advisors

DENNIS LAPORTE

Partner, UHY LLP
Managing Director, UHY Advisors
Sterling Heights, Michigan

DENNIS LAPORTE

Partner, UHY LLP
Managing Director, UHY Advisors

ANTHONY FRABOTTA

Partner, UHY LLP
Chairman Emeritus, UHY Advisors
Sterling Heights, Michigan

ANTHONY FRABOTTA

Partner, UHY LLP
Chairman Emeritus, UHY Advisors

DONNA FRYE

Director of Transfer Pricing, UHY Advisors
Detroit, MI

DONNA FRYE

Director of Transfer Pricing, UHY Advisors

JEAN HOWE LOSSI

Principal, UHY Advisors
Hudson, New York

JEAN HOWE LOSSI

Principal, UHY Advisors

GARY NEWKIRK

Principal, UHY Advisors
Kingston, New York

GARY NEWKIRK

Principal, UHY Advisors

JAMES DANIELS

Partner, UHY LLP
Managing Director, UHY Advisors
Albany, New York

JAMES DANIELS

Partner, UHY LLP
Managing Director, UHY Advisors

WILLIAM KINGSLEY

Partner, UHY LLP
Managing Director, UHY Advisors
Detroit, Michigan

WILLIAM KINGSLEY

Partner, UHY LLP
Managing Director, UHY Advisors

MARK WELSH

Partner, UHY LLP
Managing Director, UHY Advisors
Salisbury, Maryland

MARK WELSH

Partner, UHY LLP
Managing Director, UHY Advisors

HEATHER BENSON

UHY Advisors
Sterling Heights, Michigan

HEATHER BENSON

UHY Advisors

YI SHRESTHA

Principal, UHY Advisors
Columbia, Maryland

YI SHRESTHA

Principal, UHY Advisors

A. MICHAEL BUCCI

Partner, UHY LLP
Managing Director, UHY Advisors
Hudson, New York

A. MICHAEL BUCCI

Partner, UHY LLP
Managing Director, UHY Advisors

DANIEL MARKEY

Partner, UHY LLP
Managing Director, UHY Advisors
Sterling Heights, Michigan

DANIEL MARKEY

Partner, UHY LLP
Managing Director, UHY Advisors

STANLEY HOLZMAN

Principal, UHY Advisors
Columbia, Maryland

STANLEY HOLZMAN

Principal, UHY Advisors

DANIEL FELSTOW

Partner, UHY LLP
Managing Director, UHY Advisors
Sterling Heights, Michigan

DANIEL FELSTOW

Partner, UHY LLP
Managing Director, UHY Advisors

ERIC HANANEL

Principal, UHY Advisors
New York, New York

ERIC HANANEL

Principal, UHY Advisors

CHRIS HALL

Office Managing Partner, Salisbury, UHY LLP
Managing Director, UHY Advisors
Salisbury, Maryland

CHRIS HALL

Office Managing Partner, Salisbury, UHY LLP
Managing Director, UHY Advisors

JOHN SALEMI

Partner, UHY LLP
Managing Director, UHY Advisors
Farmington, Connecticut

JOHN SALEMI

Partner, UHY LLP
Managing Director, UHY Advisors

LONI WINKLER

Partner, UHY LLP
Managing Director, UHY Advisors
Farmington Hills, Michigan

LONI WINKLER

Partner, UHY LLP
Managing Director, UHY Advisors

TODD TIGGES

Partner, UHY LLP
Managing Director, UHY Advisors
Farmington Hills, Michigan

TODD TIGGES

Partner, UHY LLP
Managing Director, UHY Advisors

MICHAEL VIZZIE

Principal, UHY Advisors
Albany, New York

MICHAEL VIZZIE

Principal, UHY Advisors

MARK WITTE

Partner, UHY LLP
Managing Director, UHY Advisors
Albany, New York

MARK WITTE

Partner, UHY LLP
Managing Director, UHY Advisors

TINA STEINBECK

Principal, UHY Advisors
New York City, New York

TINA STEINBECK

Principal, UHY Advisors

STEPHEN SLATER

Partner, UHY LLP
Managing Director, UHY Advisors
New York, New York

STEPHEN SLATER

Partner, UHY LLP
Managing Director, UHY Advisors

SCOTT EARLS

Partner, UHY LLP
Managing Director, UHY Advisors
Farmington Hills, Michigan

SCOTT EARLS

Partner, UHY LLP
Managing Director, UHY Advisors

KEITH MOORE

Partner, UHY LLP
Managing Director, UHY Advisors
Sterling Heights, Michigan

KEITH MOORE

Partner, UHY LLP
Managing Director, UHY Advisors

DAWN DOHERTY

Principal, UHY Advisors
Hudson, New York

DAWN DOHERTY

Principal, UHY Advisors

JOSEPH FALANGA

Managing Director, UHY Advisors
New York, New York

JOSEPH FALANGA

Managing Director, UHY Advisors

SCOTT MCRUER

Partner, UHY LLP
Managing Director, UHY Advisors
Kansas City, Missouri

SCOTT MCRUER

Partner, UHY LLP
Managing Director, UHY Advisors

JONATHAN BECKER

Partner, UHY LLP
Managing Director, UHY Advisors
St. Louis, Missouri

JONATHAN BECKER

Partner, UHY LLP
Managing Director, UHY Advisors

PATRICK STARK

Partner, UHY LLP
Managing Director, UHY Advisors
St. Louis, Missouri

PATRICK STARK

Partner, UHY LLP
Managing Director, UHY Advisors

BRENT JONES

Partner, UHY LLP
Managing Director, UHY Advisors
Farmington Hills, Michigan

BRENT JONES

Partner, UHY LLP
Managing Director, UHY Advisors

RONALD HICKMAN

Partner, UHY LLP
Managing Director, UHY Advisors
Salisbury, Maryland

RONALD HICKMAN

Partner, UHY LLP
Managing Director, UHY Advisors

PATRICK DIGGIN

Partner, UHY LLP
Managing Director, UHY Advisors
Saratoga Springs, New York

PATRICK DIGGIN

Partner, UHY LLP
Managing Director, UHY Advisors

AMY BLOOM

Partner, UHY LLP
Managing Director, UHY Advisors
New York, New York

AMY BLOOM

Partner, UHY LLP
Managing Director, UHY Advisors

KATHY CROCKETT

Partner, UHY LLP
Managing Director, UHY Advisors
Sterling Heights, Michigan

KATHY CROCKETT

Partner, UHY LLP
Managing Director, UHY Advisors

MARIAN SHAW

Partner, UHY LLP
Managing Director, UHY Advisors
New York, New York

MARIAN SHAW

Partner, UHY LLP
Managing Director, UHY Advisors

STEPHEN F. WOLF

Office Managing Partner, Columbia, UHY LLP
Managing Director, UHY Advisors
Columbia, Maryland

STEPHEN F. WOLF

Office Managing Partner, Columbia, UHY LLP
Managing Director, UHY Advisors

LARRY JOURDEN

Partner, UHY LLP
Managing Director, UHY Advisors
St. Louis, Missouri

LARRY JOURDEN

Partner, UHY LLP
Managing Director, UHY Advisors

NANCY PATZWAHL

Principal, UHY Advisors
Hudson, New York

NANCY PATZWAHL

Principal, UHY Advisors

MARC ROSEN

Principal, UHY Advisors
St. Louis, Missouri

MARC ROSEN

Principal, UHY Advisors

PAUL YODER

Director of State and Local Tax, UHY Advisors
Houston, Texas

PAUL YODER

Director of State and Local Tax, UHY Advisors

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