What is a cost segregation study?
A cost segregation study identifies building assets which can be depreciated at an accelerated rate using a shorter depreciation life. These assets may be part of newly constructed buildings or existing buildings that have been purchased or renovated. By using shorter depreciation lives, a cost segregation study can help minimize tax liabilities and maximize cash flow.
If the expense of the construction, purchase, or renovation was in a previous year, favorable IRS rulings allow taxpayers to complete a cost segregation study on a past acquisition or improvement, and take the current year’s deduction for the resulting accelerated depreciation not claimed in prior years.
What’s on your mind?
If your health care operation owns property, you may benefit from a cost segregation study.
When managing your health care company’s fixed assets, your challenges are to:
- Reduce your income tax by maximizing your deductions
- Improve cash flow
- Stay up to date with changing tax laws
- Provide comprehensive accounting records and IRS documentation
Experience our client-focused approach
CliftonLarsonAllen performs each study with a combined tax and engineering perspective. Our services include:
- A comprehensive review by our engineering staff of your construction invoices and building plans to maximize the allocation of five, seven, and 15 year assets.
- An on-site inspection of the building to accumulate additional facts for the study — including photos of the building’s exterior and interior.
- Appropriate allocation of all indirect (i.e., soft) construction costs, which are easily overlooked.
- Final reports that provide easy-to-use data for your tax planning.
Cost segregation study services for health care providers
Almost every medical facility can benefit from a cost segregation study. Talk to us about your property, and we’ll give you an assessment to help determine if a cost segregation study is right for you.
Our cost segregation studies have reduced our health care clients’ taxes on a range of buildings, including:
- Ambulatory surgery centers
- Continuing care retirement communities (CCRCs)
- Dental offices
- Hospitals
- Medical facilities
- Physician’s office buildings
- Skilled nursing and assisted living facilities