Cost Segregation Analysis/Depreciation Studies

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Have you built, purchased or renovated a building in the past 10 to 20 years? If your answer is "yes", it is likely you are paying too much federal income tax. SourceCorp works with commercial property owners and their CPA's from across the nation to increase cash flow from constructed buildings, purchased properties and renovations by accelerating depreciation expense deductions.

Through what is called "cost segregation", the components of a building are reclassified into proper class lives according to MACRS (Modified Accelerated Cost Recovery System), case law and IRS revenue rulings. MACRS property is tangible, depreciable property that has been placed in service since December 31, 1986 as prescribed by the Tax Reform Act of 1986. For example, a building's floor, roof and walls might be classified as 39-year section 1250 real property; site improvements such as sidewalks and landscaping would be classified as 15-year section 1250 real property; communications equipment and general office furnishings as 7-year section 1245 tangible personal property and carpeting, decorative lighting and computer associated items as 5-year section 1245 personal property.

If you own or lease a facility, the depreciation deduction is one of the most significant, but often overlooked opportunities to reduce the income tax liability. Whether you are buying, building or improving a building, SourceCorp can help maximize your income tax deductions through our in-depth cost segregation service.

Abandonment Study Provides Substantial Cash Flow

links to more information on Cost Segregation:

December 16, 2004: The IRS has revised its Cost Segregation Audit Guide to include the newly issued Industry Directive on Cost Segregation in the Retail Industry: IRS Cost Segregation Audit Techniques Guide

September 23, 2004: If walls could talk money; paying less federal income tax - Hidden within the walls, roof, plumbing, electrical system and many other aspects of your commercial building are yearly federal income tax savings waiting to be discovered.

December 8, 2003: The IRS has released an industry directive regarding cost segregation issues in the restaurant industry.

December 30, 2003: The IRS has released Revenue Procedure 2004-11, which updates the sections of Rev. Proc. 2002-9 that apply to changes made pursuant to a cost segregation study.

January 2, 2004: The Treasury Department has issued temporary and proposed regulations clarifying whether changes made pursuant to a cost segregation study constitute accounting method changes under Code Section 446.