Cost Segragation Services

A Cost Segregation study is the process of allocating the costs of construction of a building, including personal property, into a client’s various asst classes.  Cost Segregation identifies personal property assets which may have inadvertently been classified as real property.  A Cost Segregation study is generally performed for new construction projects, additions, or acquisitions of depreciable tangible property.

For Industrial clients, a Cost Segregation study provides tax advantages because it identifies assets with a shorter life than the building structure which usually is depreciated over a life of 39 years.  As a result, a Cost Segregation study can identify assets whcih will have accelerated depreciation for tax purposes, providing cash flow advantages.  

When performing cost segregation services, the contractor’s payout is examined line by line with the cost of construction allocated to the following asset categories:

• Land Improvements
• Buildings - Fixed
• Buildings - Service Equipment
• Fixed Equipment
• Major Moveable Equipment
• Soft Costs

L.T. Annum’s report shows the detailed componentization of assets and assigns lives to each of the assets.