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Services

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.

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

MARC RUBIN

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

MARC RUBIN

Partner, UHY LLP
Managing Director, UHY Advisors

GREGORY PEARSON

Principal, UHY Advisors
St. Louis, Missouri

GREGORY PEARSON

Principal, UHY Advisors

LARRY JOURDEN

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

LARRY JOURDEN

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

DENNIS PETRI

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

DENNIS PETRI

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

F. MICHAEL ZOVISTOSKI

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

F. MICHAEL ZOVISTOSKI

Partner, UHY LLP
Managing Director, UHY Advisors

LONI WINKLER

Principal, UHY Advisors
Farmington Hills, Michigan

LONI WINKLER

Principal, UHY Advisors

DONNA FRYE

Director of Transfer Pricing, UHY Advisors
Detroit, MI

DONNA FRYE

Director of Transfer Pricing, UHY Advisors

N. THÉRÈSE WOLFE

Principal, UHY Advisors
Hudson, New York

N. THÉRÈSE WOLFE

Principal, UHY Advisors

PAUL MARINEAU

Director of International Tax, UHY Advisors
Detroit, Michigan

PAUL MARINEAU

Director of International Tax, UHY Advisors

MATT MARTINA

Managing Director, UHY Advisors
Houston, Texas

MATT MARTINA

Managing Director, UHY Advisors

AMY BLOOM

Principal, UHY Advisors
New York, New York

AMY BLOOM

Principal, UHY Advisors

PATRICK STARK

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

PATRICK STARK

Partner, UHY LLP
Managing Director, UHY Advisors

JOHN GALLO

Principal, UHY Advisors
Farmington Hills, Michigan

JOHN GALLO

Principal, UHY Advisors

THOMAS CALLAN

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

THOMAS CALLAN

Great Lakes Regional Managing Director, UHY Advisors

VENUS WU

Principal, UHY LLP
New York, New York

VENUS WU

Principal, UHY LLP

HAROLD MOHN JR.

Mid Atlantic Regional Managing Director, UHY Advisors
Columbia, Maryland

HAROLD MOHN JR.

Mid Atlantic Regional Managing Director, UHY Advisors

GARY NEWKIRK

Principal, UHY Advisors
Kingston, New York

GARY NEWKIRK

Principal, UHY Advisors

MEHMET UGUR

Principal, UHY Advisors, Inc.
Houston, Texas

MEHMET UGUR

Principal, UHY Advisors, Inc.

RALPH MIRANDO

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

RALPH MIRANDO

Partner, UHY LLP
Managing Director, UHY Advisors

NANCY PATZWAHL

Principal, UHY Advisors
Hudson, New York

NANCY PATZWAHL

Principal, UHY Advisors

AMANDA BERTELSEN

Principal, UHY Advisors
Sterling Heights, Michigan

AMANDA BERTELSEN

Principal, UHY Advisors

DAVID HOUSTON

Principal, UHY Advisors
Columbia, Maryland

DAVID HOUSTON

Principal, UHY Advisors

SCOTT VENTLINE

Principal, UHY LLP
Detroit, Michigan

SCOTT VENTLINE

Principal, UHY LLP

PATRICK GREGORY

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

PATRICK GREGORY

Partner, UHY LLP
Managing Director, UHY Advisors

YI SHRESTHA

Principal, UHY Advisors
Columbia, Maryland

YI SHRESTHA

Principal, UHY Advisors

TODD TIGGES

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

TODD TIGGES

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

WILLIAM KINGSLEY

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

WILLIAM KINGSLEY

Partner, UHY LLP
Managing Director, UHY Advisors

JOSEPH FALANGA

Managing Director, UHY Advisors
New York, New York

JOSEPH FALANGA

Managing Director, UHY Advisors

STANLEY HOLZMAN

Principal, UHY Advisors
Columbia, Maryland

STANLEY HOLZMAN

Principal, UHY Advisors

ROBERT POTTER

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

ROBERT POTTER

Partner, UHY LLP
Managing Director, UHY Advisors

NEHA NATHWANI

Principal, UHY Advisors
Farmington, Connecticut

NEHA NATHWANI

Principal, UHY Advisors

MARK WITTE

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

MARK WITTE

Partner, UHY LLP
Managing Director, 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

RALPH ZERBONIA

Principal, UHY Advisors
Farmington Hills, Michigan

RALPH ZERBONIA

Principal, UHY Advisors

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