For over a decade, Engineered Tax Services (ETS) has been reducing the tax liability for business and real estate owners with cost segregation. Some are unaware that the costs and benefits of a cost segregation study can still pencil out for properties of all types and sizes. Heidi Henderson and the ETS team's goal is to help clients understand the benefits of cost segregation and work to increase cash flow in the form of tax deferrals.
Properties eligible for cost segregation include buildings that have been purchased, constructed, or remodeled since 1987. ETS conducts a formal engineering based study that is typically cost-effective for buildings purchased or remodeled at a cost greater than $750K. However, newer technologies and optimized software programs have expanded the application to make sense for a residential investment property with a cost basis as little as $150K. A cost segregation study is most efficient for buildings with interior build-outs such as residential, medical, office, and tenant improvements. It can also produce retroactive tax deductions for older buildings, which in turn, generates significant benefits due to "catch-up" depreciation.