Cost Segregation is the process of separating personal property from land improvements for tax reporting purposes in hopes of uncovering federal tax savings deferral opportunities. By applying Cost Segregation studies to construction and building improvement projects, Haefele Flanagan helps clients determine whether they can reduce their tax obligations. A cost segregation study is essential to documenting the appropriate classification of capitalized costs.

Cost segregation studies by Haefele Flanagan accomplish the following:
  • Segregate construction costs into proper categories for federal tax depreciation purposes
  • Maximize dollars allocated to personal property (5-, 7-, and 15-year write-offs) categories versus real property category (39-year write-off)
  • Search for accelerated depreciation eligibility that provides faster “write-off” for tax purposes, and also provides significant cash flow benefits
  • Have the potential to uncover net present value of tax benefit approximating 2 to 3% of total capitalized costs

Haefele Flanagan’s cost segregation methodologies are well-regarded and well-documented, combining engineering expertise, cost estimating, accounting knowledge and proficiency in the relative federal income tax authorities. Our efforts have reduced clients’ income taxes by as much as tens of thousands of dollars. 

Share this Post