Local Resources
Cost Segregation Specialists & Engineering Studies
Engineering-based studies that may allow qualifying building components to be depreciated over shorter recovery periods.
Cost segregation is an advanced tax planning strategy that may allow owners of qualifying investment and commercial real estate to accelerate depreciation deductions by identifying building components that qualify for shorter recovery periods under IRS rules.
Because cost segregation studies require engineering analysis and specialized tax knowledge, they are typically performed by firms that combine engineering, construction estimating, and tax expertise.
This page is designed to help you understand what cost segregation is, when it may be beneficial, questions you may want to ask before hiring a specialist, and firms serving Northwestern Colorado and Northeastern Utah.
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What They Do
Cost segregation specialists may provide engineering-based cost segregation studies; accelerated depreciation analysis; building component classification; cost allocation studies; retroactive cost segregation studies; Form 3115 support; partial asset disposition studies; purchase price allocation; fixed asset reviews; coordination with CPAs; and 1031 Exchange planning support.
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When You Might Need One
- Purchasing commercial property
- Buying a rental property
- Acquiring multi-family property
- Purchasing self-storage facilities
- Purchasing hospitality properties
- Buying agricultural improvements
- Significant property renovations
- Reviewing previously purchased investment properties
- Long-term tax planning
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Why Their Role Matters
A properly prepared cost segregation study may accelerate depreciation deductions by identifying qualifying building components that can be depreciated over shorter recovery periods than the primary building structure. Depending on the property and your tax situation, this strategy may improve after-tax cash flow, but it is not appropriate for every property or every investor. Because tax consequences vary, investors should consult their CPA before proceeding.
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What Is a Cost Segregation Study?
Component-Level Analysis
A cost segregation study evaluates the various components of a building to determine whether certain items qualify for shorter IRS depreciation lives.
Shorter Recovery Periods
Instead of depreciating an entire building over 27.5 or 39 years, qualifying components may be depreciated over 5, 7, or 15 years when permitted under current tax law.
The study is performed using engineering analysis, construction cost estimating, and IRS guidance.
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Questions to Ask Before You Hire
- Is the study engineering-based?
- How many studies has your firm completed?
- Will the report comply with current IRS guidance?
- Do you coordinate directly with my CPA?
- Is Form 3115 support included if needed?
- What types of properties do you specialize in?
- What documentation will I receive?
- How are your fees structured?
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Local Resources Serving This Area
Choosing the right professional is an important decision.Take time to compare experience, communication style, availability, services, and pricing.We're happy to help you think through which types of expertise may be appropriate for your situation.
Colorado & Utah Regional Firms
Soukup, Bush & Associates
Colorado
Specialties: commercial properties, industrial properties, agricultural improvements, and engineering-based studies.
Haynie & Company
Colorado
Specialties: engineering-based studies, retroactive cost segregation, commercial, resort properties, and multi-family.
KBKG Cost Segregation
Colorado
Specialties: engineering studies, commercial, retail, self-storage, ranch properties, and 1031 coordination.
Source Advisors
Colorado
Specialties: commercial, industrial, lodging, and engineering-based cost segregation.
National Firms Serving Colorado & Utah
Cost Segregation Services, Inc. (CSSI)
Serving Colorado & Utah
Specialties: commercial, agricultural, lodging, and residential investment properties.
R.E. Cost Seg
Serving Colorado & Utah
Specialties: short-term rentals, ranches, warehouses, retail, and Form 3115 support.
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Related Content
Background reading and tools to help you prepare for the conversation.
Western Edge Property Group provides these resources as a convenience to help you begin your research. Inclusion in this directory does not constitute an endorsement or recommendation. We encourage you to compare experience, engineering methodology, report quality, communication style, turnaround time, and fees before selecting a cost segregation specialist.
Western Edge Property Group does not provide tax, accounting, or legal advice. Clients should consult their own CPA and tax advisors regarding the application of cost segregation strategies to their individual circumstances.
Considering a Cost Segregation Study?
Tax planning can be an important part of maximizing the long-term performance of an investment property. I'd be happy to help you understand where cost segregation fits into the broader investment picture and connect you with experienced professionals as you evaluate your options.
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