Cost Segregation Services

EquiVal helps commercial real estate owners reduce their tax liability through providing cost segregation services. Cost segregation is an IRS-accepted procedure that allows commercial real estate owners to qualify for accelerated depreciation on certain assets.

Our staff identifies items that should be properly classified for accelerated depreciation rather than the 39 years required for most non-residential real property. The result is an accelerated write-off of costs that were previously defined as real property. The savings are usually substantial.

For example, certain types of equipment, such as exhaust and ventilation systems, security systems and electrical distribution equipment can often qualify as tangible personal property with a 5- or 7-year useful life. Certain site improvements, including exterior lighting and landscaping can qualify as land improvements with a 15-year useful life.

The key is knowing exactly what qualifies for accelerated depreciation. EquiVal's skilled specialists use proven methodologies for identifying and documenting assets that are candidates for reclassification. EquiVal delivers a highly detailed Cost segregation study that documents recommended reclassifications and meets IRS requirements.

What kinds of properties qualify?

Studies can be performed on recently purchased or constructed facilities or existing facilities.

Current IRS procedures permit companies to reclaim omitted depreciation in subsequent tax filing periods by filing Form 3115. What's more, once assets are reclassified, they continue to be depreciated over shorter lives going forward, generating ongoing savings by reducing taxable income and taxes due.