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Cost Segregation

Lower your current tax burden and improve your cash flow.

Whether your real estate and related assets project consists of buying, selling, inheriting, partially demolishing, renovating, installing, building or expanding, American Appraisal’s cost (value) segregation services can assist you in generating cash flow benefits through the tax savings allowed by accelerating asset depreciation for tax accounting purposes.

Are the assets that make up your project properly classified?
In many cases, certain assets or soft costs have been improperly classified into long-life (real property) tax classes.  Our services can appropriately classify these assets and their associated hard and soft costs or values into shorter tax life classes, thus creating tax savings.

Cost segregation studies are appropriate for projects that include assets:

  • inextricably linked to specific equipment
  • integral to the manufacturing process
  • not reasonably adaptable to a general use
  • not serving more than an incidental relationship to the operation or maintenance of the building
  • accessorial to the business and not the building
  • loosely affixed to the land or building and readily removable
  • that if removed would not substantially damage the building
  • that can be, have been, or are expected to be moved

Our Services
American Appraisal’s cost segregation services can be engaged regardless of project status, including:

  • Construction planning
  • Post-construction
  • Acquisition due diligence
  • Post-acquisition
  • Retrofitting - capitalize-or-expense decisions
  • Retrospective

We also provide a comprehensive and cost-effective modeling service when fairly standard facility designs are used repeatedly.

Our services are designed to maximize your cash flow benefits and provide detailed, supportable results. Involve us early and often in your cost segregation needs.

Our Credentials

  • American Appraisal has been in business since 1896.  No other firm has been providing cost segregation services longer than American Appraisal.  We have performed thousands of cost segregation studies.
  • We consult with tax advisors to maintain awareness of cutting-edge developments within tax laws, revenue rulings and tax court cases. 
  • Our consultants have the state appraisal certifications required to legally value acquired real property assets, helping to ensure that they are not overvalued or undervalued. 
  • Our consultants are experts and have engineering-related degrees or backgrounds, allowing proper interpretation of project drawings, specifications, hard and soft costs, and purchase documents. 
  • We have a solid record of sustaining our conclusions with the Internal Revenue Service.
  • Our team members have analyzed the entire life cycle of projects from development to demolition.  As a provider of multiple valuation services, we can leverage our cost segregation services to provide additional services over time, including valuation and cost analyses for insurance, property tax and financing purposes.
  • Our consultants focus on specific industries and property types.  Understanding the function and special nature of the components that make up any given project allows us to maximize and support our conclusions.

Is it legal?
Increasingly, states are mandating that consultants within their jurisdiction be certified before they opine on the value of real property.  In addition, studies that involve preexisting/used assets also require valuation skills.  Unlike the analysis of the cost new associated with specific construction projects, cost segregation for preexisting/used assets must consider depreciation at the asset level, which can consist of physical deterioration as well as functional and economic obsolescence.  Is your cost segregation consultant certified to perform valuations and opine on the value of real property in the state where your project is located? 

American Appraisal’s cost segregation consultants are certified as required by individual states.  This is vital when segregating a project’s underlying land value and when gauging the contributory value of the various assets identified. 

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