Cost Segregation

Whether you are building, remodeling, expanding, or purchasing a facility, a cost segregation study can help increase your cash flow. Many property owners do not take advantage of these provisions and end up paying federal and state income taxes sooner than they need to.

What is Cost Segregation?

Cost segregation is a tax deferral strategy that front-loads depreciation deductions into the early years of ownership. Segregating the cost components of a building into the proper asset classifications and recovery periods for federal and state income tax purposes results in significantly shorter tax lives (5-, 7-, and 15-year) rather than the standard 27.5- or 39-year depreciation periods. In other words, you are able to defer taxes, putting more cash in your pocket today.

Construction Workers
Remodeled Office Space

Your Facility May Qualify If:

  • The facility has a depreciable basis of at least $1,000,000 or leasehold improvements of greater than $300,000
  • The facility or improvements have been placed in service any time since 1987

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Did You Know?

New Build
Recently built a commercial property; Cost Seg is a viable option

Let us determine if your new facility purchase is eligible for Cost Seg.

Even if you are in the process of remodeling or expanding.

Paid by tenant or landlord, you could be eligible for Cost Seg.

Cost Segregation Eligibility

Don’t Think Your Facility Qualifies for Cost Segregation?

  • Warehouse / Distribution
    Average Reclassification: 15%
  • Office
    Average Reclassification: 20%
  • Shopping / Retail
    Average Reclassification: 25%
  • Hotel and Motel
    Average Reclassification: 25%
  • Fitness/Health Club
    Average Reclassification: 25%
  • Bank
    Average Reclassification: 25%
  • Assisted Living / Senior
    Average Reclassification: 25%
  • Apartment Building
    Average Reclassification: 25%
  • Grocery Store / Convenience
    Average Reclassification: 30%
  • Restaurant
    Average Reclassification: 30%
  • Light Manufacturing
    Average Reclassification: 30%
  • Golf & Resort
    Average Reclassification: 30%
  • Auto Dealership
    Average Reclassification: 32%
  • Winery
    Average Reclassification: 32%
  • Self-Storage
    Average Reclassification: 35%
  • Medical Office
    Average Reclassification: 35%
  • Hospital
    Average Reclassification: 35%
  • Heavy Manufacturing
    Average Reclassification: 45%

Our Approach

At Rockerbox, our cost segregation experts combine the expertise of engineers and construction specialists with experienced accounting professionals who have a fine-tuned knowledge of tax law.

Our firm’s longevity and diverse skill set allow us to handle the most complex and time-sensitive studies. These studies result in significant tax savings.

Effective cost segregation studies should meet the relevant tax laws and guidance. We take a diligent, thorough, and effective approach to tax savings, ensuring that our analysis and research are complete, our recommendations are accurate, and project documentation is in place. When we’re striving to increase your depreciation and the corresponding tax savings, we work closely with you to find the balance between tax savings and risk.

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Can I perform my own cost segregation study?

You might be able to perform a basic cost segregation study to identify some of a building’s short life assets, but performing an accurate cost segregation study requires a tax professional like Rockerbox. We work with construction experts and engineers to deliver a thorough, accurate cost segregation study.

What are the benefits of a cost segregation study?

Generally, a cost segregation study can help property owners increase cash flow by identifying short-life property and other depreciation deductions that can be used to decrease the current tax liability.

When should I get a cost segregation study?

Companies that have recently purchased a building, built a building, renovated a building, or are planning a new building purchase or construction.