Cost segregation is a tax strategy that allows you to break down your property into different components, like lighting and flooring, and depreciate them faster. This means you can get bigger tax deductions sooner, saving you money.

Properties that qualify: Most buildings used to make money qualify, like offices, apartments, warehouses, and even vacation rentals. If you own a property that you rent out or use for business, it could qualify. Properties that don't qualify: Properties that are not income-generating, like personal residences, do not qualify for cost segregation. Additionally, properties held for resale (like inventory for developers or flippers) and land itself, without any buildings or improvements, are also not eligible. Cost segregation applies only to income-producing properties that have depreciable assets, such as rental properties, commercial buildings, and businesses.

Most CPAs and accountants focus on general tax preparation and may not specialize in cost segregation because it requires specific knowledge of engineering, construction, and tax law. Cost segregation involves detailed analysis, which is why firms like Centiv, with specialized expertise, are better suited to conduct these studies. Partnering with us can help maximize your tax savings beyond standard accounting practices.

Savings depend on your property, but typically, people save between 20% and 40% on their taxes in the first few years. The bigger and more expensive your property, the more you could save.

No, it's not too late! You can apply cost segregation retroactively by filing an IRS form, which lets you catch up on deductions from previous years.

The cost depends on how big and complex your property is. However, the tax savings usually far outweigh the cost of the study, making it a great return on investment. Interested in seeing how much we can save you? click here and fill out your property details, one of our experts will reach out within 48 hours to discuss your potential savings and costs.

A typical study takes about 4 to 6 weeks from start to finish, depending on the size and complexity of the property.

Risks of Doing Cost Segregation: The main risk is the upfront cost, which may seem significant. However, this is mitigated when working with a qualified team like Centiv, who ensures IRS compliance and provides lifetime audit protection. Additionally, we can customize payment plans to accommodate your financial needs. Risks of Not Doing Cost Segregation: Missing out on immediate tax savings by not accelerating depreciation. Paying more in taxes over decades rather than upfront. Reduced cash flow, which can limit your ability to invest in other opportunities or grow your portfolio. Missed opportunities to reinvest capital in your business or other investments, which can hinder long-term financial growth. In most cases, the benefits of doing cost segregation far exceed the risks of not doing it, as it provides substantial tax savings and improved cash flow, often with a significant return on investment.

You will typically see the benefits in your next tax filing. The accelerated depreciation reduces your taxable income, so you can expect lower tax liabilities right away.

Bonus depreciation lets you deduct a large percentage (currently 60% for 2024) of the cost of certain property components in the first year. This can lead to even bigger tax savings when you do a cost segregation study.

Yes! Cost segregation is an IRS-recognized strategy when done correctly by qualified professionals. Our team follows all IRS guidelines to make sure your study is fully compliant.

Depreciation recapture is a tax applied when you sell a property for more than its depreciated value, meaning you may have to repay some of the tax savings from depreciation. Why cost segregation still makes sense: The upfront tax savings and improved cash flow from cost segregation can be reinvested and grow over time, offsetting any future recapture tax. Recapture only applies upon sale, while cost segregation provides immediate benefits you can use now. You may also reduce or defer the recapture tax through strategies like a 1031 exchange.

Centiv works seamlessly with your CPA or accounting team to ensure our cost segregation study aligns perfectly with your tax strategy. We provide comprehensive reports and expert guidance, allowing your tax professionals to implement the savings effortlessly. Don’t have a CPA or accountant? No problem! Centiv partners with some of the top CPAs and accounting firms nationwide, and we'd be happy to refer you to trusted professionals who can assist in maximizing your tax benefits.

Centiv offers unmatched expertise, led by our founder’s decade at PwC, where he performed cost segregation studies for top clients like Porsche, the Atlanta Falcons’ Mercedes-Benz Stadium, and Olive Gardens nationwide. We now serve renowned brands like The Weather Channel, Choice Hotels, and Kimpton Hotels & Restaurants, as well as hundreds of real estate investors across all sectors and portfolio sizes, from single-property owners to large-scale portfolios. With over $250 million in tax savings delivered and lifetime audit protection on all deliverables, Centiv ensures your tax savings are maximized with full peace of mind. If you click here and fill out your property details, one of our experts will reach out within 48 hours to discuss your potential savings and costs.

The cost segregation process begins with an initial consultation to evaluate your property and potential tax savings. Once you proceed, an engineer will perform a detailed analysis of the building’s components, both on-site and through document review. This includes complex calculations to allocate costs to various asset categories that can be depreciated faster. A comprehensive report is then prepared, detailing these categories and depreciation schedules. Finally, this report is provided to your CPA or tax team for seamless integration, maximizing your tax benefits with precision and compliance. *On-site visits typically only happen once throughout the process and take approximately 2-4 hours on average depending on size and complexity of the property. Interested in seeing how much we can save you? click here and fill out your property details, one of our experts will reach out within 48 hours to discuss your potential savings and costs.

Cost segregation does not impact your property’s market value or its future resale. It is strictly a tax benefit strategy and does not alter the physical aspects or valuation of the property.

No, cost segregation does not impact your ability to get a loan. Lenders base loan decisions on factors like your credit, income, and the market value of the property, not on how you choose to depreciate the asset for tax purposes. Cost segregation simply accelerates your depreciation schedule for tax benefits, which doesn’t influence the property’s value or loan qualifications.

The primary reason you might not pursue cost segregation is if the upfront cost of the study outweighs the potential tax savings for your property. This can happen with very small properties or if you don’t plan to hold the property long enough to benefit from the accelerated deductions. However, in most cases, the long-term tax savings and increased cash flow make cost segregation a highly beneficial strategy for property owners.