If you’ve recently purchased or built a building or are remodeling existing space, now may be the time to consider a cost segregation study. A cost segregation study identifies property components and related costs that can be depreciated much faster than using standard depreciation methods, perhaps dramatically increasing your current deductions.

Typical assets that qualify include:

  • Molding, millwork and other decorative elements
  • Wall coverings, partitions, window treatments, counters, cabinets, shelving and special lighting
  • Specialized machinery and equipment, and the costs of plumbing and electrical allocable to such equipment
  • Certain land improvements located outside of a building, which may be depreciated over 15 years

The benefit of a cost segregation study may be limited in certain circumstances, such as if the business is subject to the alternative minimum tax or is located in a state that doesn’t follow federal depreciation rules.

Doeren Mayhew’s Tax Incentives Group has helped numerous clients defer taxes in excess of $1 million per year.  Contact Doeren Mayhew’s tax advisors in Michigan, Houston or Ft. Lauderdale to find out more information on using cost segregation studies as a strategy to maximize your 2013 depreciation deductions.