Cost Segregation is one of those income tax strategies that has disproportionately assisted large, and in many instances, publicly traded companies, instead of your local business, perhaps your dentist, or even your Panera on the corner.
It’s easy to assume then, that cost segregation must benefit large businesses more than small ones. If small businesses could use it so effectively, they’d already be doing it, right?
The reality is that all businesses can benefit from cost segregation, once they meet some very easy to pass rules of engagement.
- Has the owner paid more than $500,000 for the property or its improvements?
- Does the owner plan to own the property for 3 years or more?
- Is the ownership of the property or its improvements 7 years or less?
- Does the owner plan to pay income taxes in the now, or within the next 3 years?
If the answer to these questions is yes, then it is likely that cost segregation will be a useful strategy.