Why a cost segregation study is a good idea – Accelerate depreciation deductions to reduce taxes and boost cash flow

Description

Abstract: The COVID-19 pandemic has resulted in many companies conserving cash and not buying much equipment during the past year. An unintended downside is that businesses may not be able to claim the same amount of depreciation tax deductions as they have in past years. A cost segregation study may allow a business to accelerate depreciation deductions on certain items, thereby reducing taxes and boosting cash flow. This article reviews the rules on depreciating property; how, under the right circumstances, a cost segregation study can yield substantial tax benefits; who should conduct a study; and the elements of a study.