Cost segregation is an advanced tax strategy that helps property owners accelerate depreciation, reduce taxable income, and improve cash flow. This case study illustrates the advantages of performing a cost segregation study for an Auto Shop.
The goal of this study was to reclassify property components into shorter depreciation schedules to maximize tax savings and improve cash flow for the client.
The study involved:
5-Year Class Life Assets
7-Year Class Life Assets
15-Year Class Life Assets
39-Year Class Life Assets
This cost segregation study reclassified approximately 55% of the property’s total basis into shorter depreciation periods. The resulting tax benefits significantly improved cash flow and provided substantial long-term financial advantages for the property owner.
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