CSSI is proud to partner with Lima One Capital to offer specialized Cost Segregation Studies for real estate investors focused on single-family rentals, new construction rentals, and fix-and-flip properties. Together, we provide comprehensive solutions that maximize tax benefits while supporting your financing needs. Cost Segregation identifies components of your property that qualify for accelerated depreciation – items like flooring, cabinets, landscaping, lighting fixtures, and specialized electrical systems. This allows you to deduct more expenses sooner rather than later. Our engineering-based studies help rental property owners save thousands in taxes within the first few years of ownership.
Key Financial Benefits for Investors
Boost Cash Flow Without Raising Rents
Generate immediate improvements to your bottom line through substantial tax savings – creating additional funds for property improvements, debt reduction, or expanding your portfolio.
Reduce Income Tax Liability Immediately
Reclassify property components from 27.5-year to 5, 7, or 15-year depreciation schedules, drastically lowering your taxable income starting in year one.
Enhanced Return on Investment
Maximizing tax benefits can significantly increase your return on investment for residential rental properties, improving overall portfolio performance without additional capital investment.
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Who Qualifies for Cost
Segregation?
Eligibility
Cost segregation studies benefit property owners with buildings or improvements valued at $200,000 or more. The property must have been placed in service after 1986 and have remaining depreciable basis.
Single-Family Rental Owners
Long-term rental property investors can offset rental income with accelerated depreciation deductions.
Short-Term
Rental Investors
Airbnb and vacation rental owners can maximize tax benefits while operating in higher-income rental markets.
New Construction Developers
Builders creating new rental properties can implement optimal tax strategies from day one of service.
Fix & Flip
Investors
Investors who temporarily hold properties before selling can capture depreciation benefits during the ownership period.
How Does the Cost Segregation Study Process Work?
Understanding how a Cost Segregation Study helps your investment properties is simple. Our three-step process is designed to maximize your tax savings while requiring minimal time and effort from you.
Free Preliminary Analysis
We conduct a no-cost preliminary analysis of your rental property to estimate potential tax savings. Our team reviews basic information about your property’s value, age, and features to determine if a full study would provide meaningful tax benefits.
Engineering-Based Study
Our specialists examine your property to identify building components eligible for accelerated depreciation. We classify items like flooring and fixtures into shorter depreciation schedules (5, 7, or 15 years), creating significant early tax deductions.
Documentation & Implementation
We deliver comprehensive reports that your tax professional can easily implement on your tax returns. Our team provides ongoing support to ensure a smooth process from study to tax savings.
Get a Free No-Cost Analysis of Your Property
CSSI will review your property details at no cost to determine if it qualifies for cost segregation benefits. Our preliminary analysis includes an estimate of potential tax savings, helping you make an informed decision before committing to a full study. This no-obligation assessment gives you valuable insight into how cost segregation could improve your investment’s financial performance.
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Frequently Asked Questions
What is the benefit of a cost segregation study?
A Cost Segregation study reduces a building owner’s income taxes up to $100,000 for every $1 mill in building costs. The tax savings are anywhere from 3-10% of the building cost.
What is a cost segregation study?
A cost segregation study is an engineering-based analysis that reclassifies commercial real estate components and improvements between real and personal property. This reclassification accelerates the depreciable lives from 27.5- or 39-years to 5-, 7-, or 15-years.
What real estate components can typically be accelerated through a cost segregation study?
A cost segregation study can typically accelerate depreciation on many building components, including:
- Electrical installations (e.g., dedicated computer power, special lighting)
- Plumbing systems (e.g., kitchen plumbing, bathroom fixtures)
- HVAC components
- Flooring (e.g., carpet, vinyl, tile)
- Window treatments
- Cabinetry and countertops
- Decorative finishes and millwork
- Security systems
- Fire protection systems
- Parking lot paving and lighting
- Landscaping and site improvements
- Certain building exterior components
Does my property qualify for a cost segregation study?
Your property likely qualifies if:
- It’s a commercial building or building improvements with a remaining depreciable basis
- The building or improvement cost basis is at least $200,000
- You anticipate holding the property for at least three years
When should a cost segregation study be done?
A study can be completed in the year the building or improvements are placed in service. However, it can also be done on properties acquired or constructed since 1986 without amending prior years’ tax returns.
How long does a cost segregation study take?
A cost segregation study typically takes approximately three to six weeks from the time we receive all the appropriate documentation.
What information is needed to complete a cost segregation study?
Generally, we request:
- A current tax depreciation schedule
- Building cost information
- Blueprints or architectural drawings and renovation plans, if applicable
- Access to the property for an on-site inspection and walk-through
How much can I save with a cost segregation study?
Savings vary, but within the first five years of building ownership, owners could save up to $100,000 for every $1 million in building costs.
Will a cost segregation study trigger an audit?
No, a properly conducted cost segregation study has never triggered an audit. In fact, if you are audited for any reason and the study comes into question, CSSI will defend the audit at no cost.
Can a cost segregation study be done on buildings not yet constructed?
While a full study can’t be done on unconstructed buildings, CSSI can provide estimates on tax savings from your construction budgets. A full study will be delivered when construction is complete.
