Many commercial property owners overpay federal income taxes every year because they do not take advantage of allowable depreciation expense deductions. These accelerated depreciation expense deductions are readily available to all federal taxpayers under existing IRS tax laws.
With an engineering-based cost segregation analysis, the taxpayer is able to take full advantage of the tax law, thus forgoing the significant cash flow remitted to the IRS each year. We utilize IRS-accepted methodologies and existing tax law, revenue rulings and case law to achieve substantial tax saving benefits for clients.
Engineering-based cost segregation studies identify and “break out” personal property components and land improvements from the structural building cost. Waide and Associates’ engineers get "behind the walls," segregating all possible subcomponents that qualify for shorter depreciable lives. We utilize IRS approved construction industry standards in the cost estimations.
Correct cost allocations mean shorter depreciable lives for those components. 39 year and 27.5 year depreciable lives are reduced to 5, 7, and 15 years.
Depreciation rates increase from a straight line calculation 39 years to the use of accelerated depreciation methods such as double declining method for 5 year, 7 year and 15 year depreciable lives.
The commercial property owner gets the benefit of deductions over a shorter period of time plus the use of accelerated depreciation write off methods that are quicker than the straight line method.
Indirect building costs are also correctly allocated and depreciated properly.
