Cost segregation is a detailed analysis of the cost of new or existing properties. This analysis, when completed by capable construction engineers working hand in hand with tax specialists, identifies building components that can be depreciated over shorter lives (5 years, 7 years and 15 years) versus the total building cost being depreciated over 39 years. This analysis and methodology of depreciation greatly increases the depreciation deduction in the early years of the building and generates substantial tax savings when prepared correctly. Winchester Bay offers you the specific skills and expertise to make sure that this happens.

The IRS has published in its Audit Guide that a quality cost segregation study must be completed by those who not only have a thorough knowledge of the tax law but also a complete understanding of engineering methodologies and construction pricing. CPA’s may have specific knowledge of the appropriate tax law, but they are typically absent of the required construction expertise. Winchester Bay has the necessary skill and experience in each professional field, as is required by the IRS.

No. A cost segregation study can be performed on new and old buildings alike. Separate methodologies may be employed under various circumstances, but any income-generating property is a viable candidate.

No. Cost segregation has been performed since 1987, when the tax law was changed to limit the allowable depreciation for real estate. However, it has only become mainstream for small and medium sized companies since April of 2004, when the IRS Cost Segregation Audit Guide was published.

Absolutely not. An Internal Revenue Service Attorney in Washington D.C. stated, "We are happy to see a cost segregation study performed on real estate. If the study’s quality is apparent, then we know that there is a much better chance for the assets to have the accurate class lives than if a tax consultant simply makes random guesses."

Winchester Bay specializes exclusively in providing quality cost segregation studies and reports. All other tax services must be provided by an independent CPA.

Any income generating property is a candidate for a cost segregation study.

The fees for the cost segregation service range between $5,000 and $30,000. The fee is based on the size of the required study and amount of information that must be discovered and documented. Although there are trends for different types of buildings, each structure is quoted individually to accommodate their unique requirements.

No. A cost segregation study can be accomplished at any time during the year. Most companies and individuals pay estimated taxes throughout the year and a cost segregation study can bring a very attractive efficiency to cash flow management.

A Winchester Bay cost segregation study already provides the answers to the depreciation questions that would be asked in an audit. Our study follows the same outline as the IRS Audit Guide so that those who would perform an audit can easily reference it.