Cost Segregation Services

We deliver each of our services through a team of financial professionals who adhere to the highest standards of our industry. And when you become a DMJ & Co., PLLC client, everyone on our team works for you.

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Cost Segregation Services

We deliver each of our services through a team of financial professionals who adhere to the highest standards of our industry. And when you become a DMJ & Co., PLLC client, everyone on our team works for you.

Cost Segregation: Accelerating Tax Deduction on Business Property

Whether you are constructing a new building, expanding an existing one, purchasing real estate, rehabilitating an old facility, or relocating with leasehold improvements, your property can generate much faster tax deductions and cash flow savings than you realize. Substantial tax deduction acceleration and cash flow savings can be achieved by taxpayers who properly classify their construction or acquisition costs between real and personal property.

DMJ & Co., PLLC’s cost segregation services carefully break down construction and/or acquisition costs and allocate them to specific categories, maximizing accelerated depreciation for qualifying building components. The shorter the depreciation period of building components, the more you save on property taxes. 

DMJ’s detailed cost segregation studies pay for themselves many times over, starting with the first year the property is placed in service. Investing in cost segregation for tax purposes will maximize your depreciation benefits, and provide fully documented support for your depreciation claims should you be audited by the IRS.

How DMJ Conducts Cost Segregation Studies

The key to a successful cost segregation study is that the allocation is based on an engineering approach combined with work paper documentation. DMJ works in close affiliation with a professional group of construction engineers who have a thorough knowledge of the tax code and experience in successfully defending cost segregation studies before the IRS since 1981. 

Using tax, construction, and engineering skills, DMJ’s cost segregation services will thoroughly analyze your construction and/or acquisition costs. We then perform quantity take-offs from the construction drawings, which maximize the amount of personal property costs and provide the required documentation to support our conclusions.

Building costs are generally classified for federal income tax purposes into three categories. Each category has a different depreciation recovery period and method under the Modified Accelerated Cost Recovery System (MACRS).

Tangible Personal Property

5 or 7 years

Land Improvements

15 years

Real Property

39 years

DMJ’s cost segregation for tax purposes will help you identify items that should be properly classified. For example, a taxpayer who owns a manufacturing facility could classify the cost of certain equipment foundations, exhaust and ventilation systems, security systems, and electrical distribution as tangible personal property. Certain site improvements such as landscaping, underground utilities, and site lighting could qualify as land improvements. Knowing the difference is critical. So is the ability to support and document the decisions.

DMJ’s cost segregation professionals unbundle costs and assign them appropriately – not only the direct costs, but also a portion of any indirect costs, such as architect and engineering fees, contractor’s general conditions, permits, and bonds. We have extensive knowledge of construction methods, engineering, and the Internal Revenue Code, including the applicable tax court cases and revenue rulings. The capabilities of our cost segregation services, which combine accounting and engineering expertise, include the ability to read blueprints and fully understand construction materials, costs, and taxation.

Partner With DMJ to Maximize Property Tax Reduction

Do you want to generate a faster return on your property investment? DMJ’s cost segregation services can help. Our accounting and tax professionals will work closely with construction engineers to help you save more money by depreciating individual components of your property. Contact us now to learn how our Top 300 INSIDE Public Accounting firm can reduce property tax payments to improve cash flow and maximize your profits.

Connect with Your DMJ & Co., PLLC Professionals

R. Milton Howell III, CPA, CSEP
Andrew A. Steel, CPA
Michael R Gillis, CPA, PFS, CGMA
Drew Haddock, CPA
R. Milton Howell III, CPA, CSEP