Cost Segregation = Accelerated Depreciation
A cost segregation study is a process used for income tax purposes that examines the various components of a property, such as plumbing fixtures, carpeting, and sidewalks, which are typically part of a building acquisition or development. Instead of depreciating these components over the same useful life as the entire building (27.5 or 39 years), the study categorizes them separately. This allows property owners and investors to benefit from an accelerated depreciation timeline for certain building elements, potentially resulting in tax savings.
The 3-Step Process is Simple, Intentionally.
STEP ONE
We’ll perform an evaluation as to whether the tax savings will substantially outweigh the costs, including impacts on timing of cash flows
STEP TWO
If it makes sense, our Cost Seg team will kick off the study and will keep you in the loop at each stage of the process
STEP THREE
We’ll claim the accelerated deductions on your behalf in the most tax-advantaged manner possible
Small firms don't do Cost Segs. Big firms charge too much.
Our cost segregation team uses a lean approach that takes advantage of cost efficiencies of batching site visits when engineers are needed on the ground and, when not needed, we deploy other non-engineer professionals who live near the property to perform site visits guided by a remote engineer.
Maximize ROI with a Cost Segregation Study
A cost segregation study isn’t just about accelerating depreciation—it’s about unlocking hidden cash flow and maximizing the return on your real estate investment. By reclassifying building components into shorter depreciation schedules, you can significantly reduce current tax liability, free up working capital, and reinvest those savings back into your business or portfolio.
For many property owners, the ROI of a cost segregation study is immediate, with tax savings often exceeding the cost of the study in the first year alone. Whether you own commercial real estate, multifamily properties, or short-term rentals, this strategy allows you to:
- Increase after-tax cash flow in the early years of ownership
- Accelerate depreciation deductions to offset taxable income
- Reinvest savings into growth opportunities or debt reduction
- Enhance overall property ROI without changing operations
At Dark Horse CPAs, our team specializes in tax strategies like cost segregation that deliver measurable results. We help you understand the true impact on your bottom line so you can make confident, tax-smart decisions.
Your tax pro didn’t suggest doing a cost seg study because you didn’t ask
Most tax pros have very little experience with cost segregation studies and don’t know reputable cost seg firms to refer clients to, assuming they both knew when it would make sense for a client and were capable of delivering the planning advice to the client.
Too many times, this tax planning opportunity is glossed over or entirely ignored.
Which Type of Property Qualifies?
Cost segregation can be done for buildings purchased or built since 1986, and that includes renovations. It’s especially beneficial for large-scale property developers and investors. You don’t need to be big to benefit, though. Cost segregation applies to many types of properties, including, but not limited to:
- Manufacturing Plants
- Restaurants
- Automobile Dealerships
- Office Buildings
- Hotels
- Distribution Centers & Warehouses
- Healthcare Facilities
- Shopping Centers
- And More
- Retail Stores
- Financial Institutions
- And More
Your Cost Segregation Experts
Suzi Drennen, CPA
Principal
Jordan Keller, CPA
Principal
John Warner, CPA
Principal
Teddy Mizerak, CPA
Principal
James Larsen, CPA
Principal
Craig Trimble, CPA
Principal
Adam Ripperdan, CPA
Principal
Tim McLain, CPA
Principal
Megan Durst, CPA/ABV, CVA
Principal
Mike Madden, CPA, EA
Principal
Matthew Lynch, CPA
Principal
Wayne Eager, CPA
Principal
Matt Reese, CPA
Principal
Brady Kelly, CPA
Associate Principal
Tim Whelan, CPA
Principal
Tim McLain, CPA
Principal
Chris Ries, CPA
Associate Principal
Christopher Papp, CPA
Associate Principal
Jim Fisher, CPA
Associate Principal
Joe Detrow, CPA
Associate Principal
Are You Ready?
There is a lot to unpack when it comes to each individual's unique tax planning strategies. If you would like to see if we can help, reach out today.
Nancy R.
I have used James Larsen as my CPA for many years and am confident in his work ethic and tax knowledge.
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