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Cost Segregation

Do you own depreciable property, plan to purchase or construct real property, or make leasehold improvements to your existing facilities? If so, you may benefit from significant tax savings. Cost segregation is an effective tax savings strategy which allows for the reclassification of certain property, such as commercial or residential buildings, for shorter depreciation periods. Shorter depreciation periods accelerate deductions, resulting in reduced current taxable income and increased cash flow.

Benefits of a cost segregation study include increased depreciation in earlier years, increased cash flow, and future write-offs when structural components are replaced.

Lumsden McCormick’s cost segregation specialists work closely with individuals who have constructed, purchased, remodeled, or expanded property to achieve tax savings. We begin by conducting a risk analysis and then move on to identify construction-related costs that can be depreciated over shorter periods than the related building. These items usually include nonstructural elements that are affixed to the building such as carpets, wall coverings, lighting, and portions of the electrical and heating systems, as well as exterior improvements such as sidewalks and landscaping. 

Depending on your particular circumstances, 25 percent or more of the cost of your building may be reclassified, resulting in significant present value savings.

For more information about cost segregations services from Lumsden McCormick, contact a Lumsden McCormick service leader or complete the information below.

Services Leaders

Kerry Roets

Kerry A. Roets, CPA


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Webinar Series Part IV: IRS Audit - Coming Soon Near You

Webinar Series Part IV: IRS Audit - Coming Soon Near You

July 14, 2021

The executive branch is looking to increase revenue for the IRS. Translation: expect to see an increase in the number of IRS audits being performed, including industries not traditionally targeted.

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Webinar Series Part V: Changes to Lease Accounting and How it Impacts Your Business

Webinar Series Part V: Changes to Lease Accounting and How it Impacts Your Business

July 27, 2021

The accounting for leases is changing significantly. The required implementation of FASB ASC 842 will mandate that most leases are included on the balance sheet as a right-of-use asset, with a corresponding lease liability. The new standard will impact nearly all commercial businesses and nonprofit organizations and is effective for annual reporting periods beginning after December 15, 2021.

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