The Key to Success With Cost Segregation in the Pre-Construction Phase

Today, Cost segregation is a strategy that more developers are utilizing into their construction plans. This strategy is a great way to increase cash flow. 

When cost segregation is applied during the design phase of a building, many components that would normally be considered real property “become” tangible personal property.

As you begin designing and developing a new commercial real estate construction project, it is vital you work with the General Contractor. This will guarantee that everything goes the way you had planned for it to and that everything is set within the cost segregation study.

One of the primary reasons it is beneficial to start the cost segregation process prior to the construction phase is so that subcontractors can be used. By applying these techniques during construction, the use of subcontractors will ultimately help distribute the costs properly. 

The whole reason you want to include cost segregation into the plans is to take advantage of the numerous tax benefits that are available

Here are few things to know about them:

Primary benefits of a Cost Segregation study:

  • A cost segregation study will reduce your taxable income 
  • It allows building owners to deduct depreciation earlier.
  • Through cost segregation you will experience the business growth, which will result in even more cash flow.

This is precisely why you want to integrate this approach as early in the process as possible. It will give you the opportunity to communicate with all of the people that will be associated with the project. In doing so, you will be able to maximize the overall tax benefits while fulfilling the agreement from the start.

O’Connor Cost Segregation team members will interact with you to answer all of your questions about cost segregation depreciation approach, and will assist you in determining if a cost segregation study will be of benefit to you. 

O’Connor team will provide a preliminary analysis that will estimate approximate savings for your asset based on studies previously completed on similar assets.

You will know everything about cost segregation by visiting our website, where you can also sign up for your property tax analysis for free. 



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