Cost Segregation Services

Discover the Tax-Saving Power of Cost Segregation with Bement & Company

At Bement & Company, we’re always on the lookout for strategies that can significantly enhance the financial outcomes for our clients, especially when it comes to maximizing the value of rental properties. One of the most effective tools we’ve found? Cost segregation. This powerful tax planning strategy can transform the way you approach depreciation, turning long-term deductions into immediate tax savings.

What Is A Cost Segregation?

A cost segregation is a formal and precise, IRS-recognized process that identifies and reclassifies various components of your rental property, allowing for accelerated depreciation deductions. Traditionally, rental properties are depreciated over 27 to 39 years. However, certain components of your property can actually be depreciated much more quickly—sometimes even immediately—thanks to the tax law changes introduced in 2018.  Instead of writing something off over 27-39 years we can reclassify some parts of your real estate to be written off in the 1st year, or over 5, 7, or 15 years.

How Does It Work?

Through a detailed cost segregation study, we dissect your property into the different depreciable life categories (the building is 27-39 years,  land, and the other accelerated depreciation eligible parts of the asset), many of which qualify for accelerated or “bonus” depreciation. This means instead of slowly recouping your investment over decades, you could write off significant portions of your property now. For example, as of the 2022 tax law, you might deduct 100% of certain property components in just one year, with this percentage set to decrease annually through 2025.  2023 it has dropped to 80% of those parts of the real estate eligible for bonus depreciation.

What Qualifies for Accelerated Depreciation?

Items that often qualify for this accelerated approach include, but are not limited to:

• Flooring and carpets

• Appliances

• Furniture and fixtures

• Decor elements

• Outdoor features like fences, sidewalks, and landscaping

• Non-structural improvements like insulation

The Financial Impact

By opting for a cost segregation study, you position yourself to unlock substantial tax benefits immediately. After a thorough review of your property, we provide a preliminary estimate of the accelerated depreciation deductions you could expect. This upfront analysis translates into direct tax savings, putting the equivalent of cash back into your pocket by reducing your current year’s tax liability.

Considerations and Next Steps

Immediate Benefits: The immediate tax savings from a cost segregation study can translate to cash back in your pocket in the form of income tax savings. Before proceeding, we’ll provide you with an estimate based on a preliminary review of your property.

Pricing: Our comprehensive cost segregation service is priced to include the detailed study itself plus the additional reporting requirements on your tax return. For specific pricing, please refer to our pricing sheet. Typical pricing is between $1,500 and $8,000 for the study, analysis, summary report, and including the bonus depreciation on your tax return filings.

Long-Term Considerations: Planning to sell? It’s important to note that accelerated depreciation could affect your property’s capital gains tax. However, for those invested in the long-term real estate game, strategies like 1031 exchanges offer pathways to defer or avoid these taxes.

Ready to Maximize Your Property’s Potential?

To explore the benefits of a cost segregation study for your rental property, contact us at jamie@bementcompany.com, reception@bementcompany.com, or schedule a free consult below. We’re here to guide you through the process, from initial assessment to finalized deductions. Things you’ll likely need to get started:

• Full property address

• Acquisition details (purchase price and date) Closing/settlement document is preferred if possible

• Property tax notice (current or prior year)

• Interior and exterior photos

• Building square footage and layout details

At Bement & Company, we’re committed to leveraging every available strategy to enhance your financial well-being. Cost segregation is just one of the many tools we use to ensure our clients achieve optimal tax efficiency and savings. Let’s unlock the full potential of your real estate investments together.