Cost Segregation
Maximize the return on your investment
Savvy real estate investors generally want to take every reasonable measure to increase their returns. One of the most effective ways to do this is to reduce income tax liability with cost segregation.
Cost segregation accelerates the rate investors can claim tax deductions. By writing off assets faster than traditional straight-line depreciation, your business can reduce its income tax rate, increasing the business’s cash flow and profitability.
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We Provide your CPA with an Independent opinion that will withstand IRS Review
A Cost Segregation Study requires expertise in engineering and construction, not just tax. That is why most accounting firms leave the cost segregation work to experts like us. Even the National firms with in-house analysts reach out to us to make the tough calls for the projects that need more construction expertise, or to defend their client’s study under audit. We provide your CPA with the substantiation necessary, providing you with all the advantages and opportunities that cost segregation allows, in a fully defensible study.
How Cost Segregation works?
By way of a technical construction analysis, our engineering team performs a reconciliation of all building costs to properly reclassify assets into 5, 7 or 15-year property eligible for bonus depreciation. Without a study, the value placed on the building shell is overstated.
Real Estate Assets are Segregated
Building Shell
(depreciated over 39 years or 27.5 Years)
Ex: Foundation, walls, Roof, etc.
Personal Property
(depreciated over 5 or 7 years, double declining method)
Decorative lighting, specialty electrical, plumbing, carpeting etc.
Land Improvements
(depreciated over 15 years, 150% declining balance method)
Ex: Parking lots, landscape, sidewalks, fences.
Raw Land
(non-deprceiable)
Proper documentation can protect a taxpayer from dispute.
How Can Cost Segregation Benefit
Your Bottom Line?
Increased depreciation in earlier years
Increased cash flow
Allows for future tax write-offs when structural components are replaced
Creates losses to carry back for a tax refund
Tax benefits also carry forward to future tax years
The cost of the analysis is inexpensive compared to the savings
All Types of Buildings Can Benefit
Cost Segregation analysis allows 15% to 80% of construction costs to be written-off faster – over a shorter allowable depreciable life per the IRS – maximizing your cash value, and the value of your investment.
WHO QUALIFIES?
Whether you have a large real estate portfolio or are a first-time tenant, cost segregation can help reduce your tax liability.
Acquisition or new construction in excess of $500,000?
Expanding an existing facility or undergoing major renovations?
Acquisition or new construction in excess of $500,000?
Acquisition or new construction in excess of $500,000?
When should I have a Cost Segregation Study done on my property?
A study can be beneficial at any time during the life of the property – beginning in the early design build stage, and even many years after ownership.
Meridian can help you identify the timing that is most advantageous for you based on your entity structure, product type, investment goals and exit strategy of your investment.
Opportunities Provided By Cost Segregation During the Real Estate Lifecycle.
New Construction
This proactive approach allows our experts to identify potential tax savings, incentives and strategies in the design-build stage resulting in a better documentation trail and tax-related Value Engineering opportunities.
Set up a consultation to uncover the tax savings in the architecture of your next project.
Look-back/ Catch up Opportunities
The IRS allows current building owners to go back as far as 1986 and “catch up” on depreciation they could have deducted from the day the property was placed in service, without amending prior tax returns through a simple change in accounting method. Catch up on missed opportunity in prior years including accelerated depreciation, bonus, Qualified Improvement Property (QIP) property, identify dispositions, and opportunities to expense vs capitalize. The depreciation is caught up in the year you do the study.
Disposition of Assets:
Renovation & Demolition
With a good, detailed study, the opportunity for dispositions is maximized both retroactively, and in current or future years. Has your property undergone frequent renovations via property refresh or tenant turnover, or are you expanding an existing facility or undergoing major renovations?
Note: Cost Segregation can also provide defensible values in determining whether expenditures are capital improvements or deductible repair
Our Solutions are Tailored to Fit the Client
If a business is not currently profitable or the property is a short-term hold, it may not make sense to do a study or it may make sense to wait a few years. Our clients trust us because we are firm in our commitment to do what is right for the client.
IRS Experience
Meridian has the experience and proven track record to successfully defend studies before the IRS.
Based on our reputation of favorable outcomes on audits, dispute litigation, and direct dealings with the IRS on landmark tax cases – taxpayers under appeals with other providers’ studies and other providers solicit our advice.
Our lead engineer is recognized by the U.S. Tax Court as an industry expert witness in cost segregation, and has served as a subject matter expert witness on behalf of taxpayers AND the IRS.
IRS Experience
Meridian has the experience and proven track record to successfully defend studies before the IRS.
Based on our reputation of favorable outcomes on audits, dispute litigation, and direct dealings with the IRS on landmark tax cases – taxpayers under appeals with other providers’ studies and other providers solicit our advice.
Our lead engineer is recognized by the U.S. Tax Court as an industry expert witness in cost segregation, and has served as a subject matter expert witness on behalf of taxpayers AND the IRS.
Our Experience Becomes Your Asset
- Meridian clients benefit from our experience, earned from audits with public companies and institutional clients defending their fixed asset classifications for depreciation and future write-offs.
- As a result of our tax code, regulatory, and case law expertise, we frequently identify 10% more documentable benefits than our competitors
The IRS Refers To Us As The Authority
Our leadership team has helped shape cost segregation on behalf of taxpayers.
We take the burden of proof off the taxpayer and CPA by providing details for the entire building in a construction format that’s easy for the IRS to follow under audit. With a track record dating back to the late 1980s, we earned the respect of the IRS based on the quality of our studies.
We were told the IRS referenced our lead engineer’s methodology as the standard when drafting the detailed engineering approach to cost segregation in the Audit Techniques Guide.
The IRS Refers To Us As The Authority
Our leadership team has helped shape cost segregation on behalf of taxpayers.
We take the burden of proof off the taxpayer and CPA by providing details for the entire building in a construction format that’s easy for the IRS to follow under audit. With a track record dating back to the late 1980s, we earned the respect of the IRS based on the quality of our studies.
We offer a complete audit trail...
ticked and tied
We take the burden of proof off the taxpayer and CPA by providing details for the entire building in a construction format that’s easy for the IRS to follow under audit. With a track record dating back to the late 1980s, we earned the respect of the IRS based on the quality of our studies.
Our Reports Have Successfully Withstood The Scrutiny of:
100% Success
over 2,000 combined revenue agent reviews (RAR)
Full Audits
On completed projects both pre- and post 2004
1,100+
CPA reviews
Our Broad Range of Industry Experience Includes:
Everything from billion dollar projects to small build-outs
Classified facility inspection with National Security Clearance
More than 18,000 studies of every commercial property type
Projects in all 50 states, Mexico, Europe, the Middle East, and South America
A Step Ahead of The Competition
We provide competitive pricing for projects of all types and sizes without compromising quality. Our clients appreciate the combination of value and service they receive, leading to their repeat business.
A Step Ahead of The Competition
We provide competitive pricing for projects of all types and sizes without compromising quality. Our clients appreciate the combination of value and service they receive, leading to their repeat business.
Case Studies
67% of Assets Reallocated to Shorter Life Resulting in $461,354 Cash Benefit in Year One
$3.4M in 1st Year Depreciation and $1.3M in Retirements on Renovations
First Year Tax Benefit of $282,430 and 46% of Assets Reallocated
67% of Assets Reallocated to Shorter Life Resulting in $461,354 Cash Benefit in Year One
$3.4M in 1st Year Depreciation and $1.3M in Retirements on Renovations
First Year Tax Benefit of $282,430 and 46% of Assets Reallocated
Get Started
Meridian absorbs the cost of the initial analysis which illustrates how much your tax benefits will be.
The process is simple.
We just need basic information about your property to get started:
Property acquisition/construction cost (less land value)
Placed-in-service date
Building square footage/acreage
Property use (manufacturing, office, retail, etc.).
Our Approach
The Conversation
We gather some basic information about your property, business structure and asset strategy in order to provide an illustration of potential tax benefits specific to your property.
The Analysis
Based on the agreed-to scope of services, our cost segregation engineers perform a detailed analysis of your property including a comprehensive site visit.
The Results
We provide a fully defensible, “CPA-ready” report based on your specific tax strategies and circumstances.
Get an Estimate or Talk to an Expert
Want to speak to one of our experts?
- 312-697-7187