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Real Estate Cost Segregation
Services
Through DDF’s cost segregation studies, you
can accelerate income tax depreciation deductions, providing
you with improved cash flow.
Valuable Tax Savings Embedded in Buildings
Your company’s real estate likely represents
a large capital investment. With DDF’s engineering-based
cost segregation studies, you maximize your real property’s
financial return by generating significant cash flow
savings. Our cost segregation professionals generate
cash tax savings by carving out shorter-lived assets,
qualifying for five-, seven-, or fifteen-year write-off
periods, that are normally embedded in a building’s
construction or acquisition costs, generally depreciated
over thirty-nine years.
DDF will help you uncover these buried
tax savings from:
- New buildings presently under construction
- Existing building undergoing renovation, remodeling,
restoration, or expansion
- Purchases of existing properties
- Office/facility leasehold improvements and "fit-outs"
- Post-1986 real estate construction, building acquisitions,
or improvements where no cost segregation study was
performed (even though the statute of limitations
previously closed on the property construction/acquisition
year)
Profit from the benefits of your cash flow savings!
For every million dollars of property you reclassify
for faster depreciation write-offs, the present value
of your increased cash flow from income tax savings
approximates $100,000 or more.
A Solid Case for Cost Segregation — DDF’s
Engineering-Based Approach
With a DDF cost segregation study, you have evidence
for material tax savings. We provide full documentation,
employing engineering and cost estimating procedures
recognized in IRS rulings and judicial decisions. A
complete "audit trail" traces derived unit
costs from contract documents and other source data.
Your property is categorized into shorter-life classes
based on applicable tax authorities.
During a cost segregation study, we:
- Physically inspect the property
- Examine architectural/engineering drawings and
specifications for potential asset reclassification
- Analyze cost data, including the contractor’s
application of payments, change orders, owner-incurred
costs, and indirect disbursements
- Prepare an itemized list of property units qualifying
for shorter-life classification based on relevant
income tax authorities
- Apportion direct labor, material components, and
indirect costs based on engineering drawings and specifications
- Reconcile total costs per the engineering analysis
to capitalized project costs
You Save At Least $10 in Benefits for Each Dollar
Invested in Your DDF Cost Segregation Study!
You get a tremendous payback for your investment in
professional fees. Clients routinely receive present
value cash flow savings at ten to twenty times or more
their investment for the study. A DDF cost segregation
study truly maximizes the value of your real estate
assets.
Enjoy the Windfall for Real Property Previously
Built or Acquired
You now have a valuable opportunity, courtesy
of the IRS, if you constructed or purchased real estate
in a prior year but did not take advantage of a cost
segregation study. This allows you to
deduct prospectively over a four-year period depreciation
amounts to which you were legally entitled but did not
claim due to erroneous property classification as a
thirty-nine-year depreciable building.
This cash flow windfall is available to you, even though
the statute of limitations previously closed on the
property construction or acquisition year. The DDF cost
segregation team has the engineering and appraisal skills
to "carve out" the overlooked shorter-life
assets and file the necessary IRS paperwork to recover
your tax deductions.
Example:
Light Manufacturer acquired a facility four years
ago for $6 million. Based on the cost segregation analysis,
DDF engineers determine that 30% of the building qualifies
for short-life classification. By performing the cost
segregation study and filing required accounting method
change documents, DDF creates present value cash flow
savings from a tax reduction approximating $310,000.
What About My Accountant?
Cost segregation is a highly specialized segment of
tax law. The volume of judicial decisions, IRS ruling,
regulations, and other interpretations spans thousands
of pages of text. The challenge is to apply this complex
knowledge to the unique facts of your industry, your
company’s circumstances, and the processes of your
operation. Because our team has conducted thousands
of cost segregation studies throughout the United States,
we bring vast practical experience to your project.
Why take unnecessary risks? A nonspecialist accountant
who segregates percentages of construction costs based
on invoices or other means will likely leave valuable
tax benefits "on the table," and the resulting
documentation may not withstand IRS examination.
We work in tandem with your CPA, whether you’re
served by a large international firm, a regional firm,
or a local accountant, to serve your best interests
and save you money!
Why DDF?
Dean, Dorton & Ford is a progressive firm of certified
public accountants and other professionals who are dedicated
to helping our clients satisfy a variety of business
needs.
Our clients cover a broad spectrum of organizations
involved in many industries. With every client, we endeavor
to become valued business advisors. In addition to satisfying
needs for recurring tax compliance, accounting, and
employee benefits plan administration services, we use
our knowledge of their business and our understanding
of their industry to offer ideas and feedback to help
them achieve their business and financial goals. From
our office in Lexington, Kentucky, we provide services
to our clients in Kentucky and beyond.
We have developed an alliance with an engineering firm
that has vast experience in performing cost segregation
studies, and we are pleased to be able to provide this
valuable service to our clients and other businesses
in our market area.
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