How Property Owners Can Cut Income Taxes Using Cost Segregation Studies

    by: Ted Isensee, Senior Advisor of Growth Management Group & Lynn Dee Murrow, EVP Lifestyles Unlimited®
    “Cost Segregation,” the name isn’t sexy but the results definitely can be! It is a powerful tool enabling Commercial and Multi Family property owners to cut their federal income tax burden. Many owners have never heard of Cost Segregation. Unfortunately, many of their tax preparers, including many CPAs, have not heard of it either. Of those who are familiar with Cost Segregation, many do not know how to use this tax reduction tool effectively.
    Cost Segregation is a method for analyzing the components of a building and calculating depreciation on the individual components instead of the building as a whole. Why does it matter? With Cost Segregation, you can depreciate components of the building over a shorter, “accelerated” period of time. With more depreciation, taken more quickly, you save more on your income taxes.
    The Internal Revenue Service (IRS) says “Cost Segregation studies should be performed by qualified individuals or firms employing personnel competent in design, construction, auditing, and estimating procedures relating to building construction.” By using specialists in cost segregation studies, you or your tax preparer or CPA can ensure that you get the maximum tax benefits, and the assurance that the tax deductions will stand up to IRS review.
    The specialist doing the cost segregation study does not replace your tax preparer or CPA. Instead, they give your tax preparer or CPA the analysis they need to support the accelerated depreciation deduction on your tax return. The Growth Management Group (GMG) specializes in cost segregation studies. We use a team of highly qualified professionals who adhere to the IRS recognized Detailed Engineering Approach to perform all cost segregation studies. This methodology maximizes benefits and assures that IRS guidelines are followed.

Apartment Owners, as well as other types of commercial property owners, can benefit from cost segregation studies. An average cost segregation study offers approximately $150,000 in additional depreciation per $1 million in purchase, construction or renovation cost over the normal 39-year straight-line depreciation method.

If you or your partners own an apartment or commercial property that cost more than $500,000 (including renovations) and you are not already using cost segregation techniques, give us a call at 888.705.5557 x6256, email us at, or explore our website: We can quickly determine if you will benefit from using cost segregation, the tax benefits are typically about ten times the amount of our fee. That’s a return on investment any property owner will love!

As a real estate investor, whether you are a seasoned pro or just starting out, you will also benefit from the education and mentoring provided by Lifestyles Unlimited®. Click the button above to start your education today or call 866-945-6565 to learn more about their education and mentoring programs for real estate investors.

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