How can Cost Segregation Study LLC help you?

At Cost Segregation Study LLC, our approach is goal-oriented.  We create value for our clients, and do not interfere with current business relationships.  We are willing to work with your existing accountant to help you r company realize the value our service can provide.

Our construction engineering and tax specialists examine real estate holdings to determine which costs can be segregated and depreciated over a much shorter recovery period, rather than over a 39-year depreciable life.

  • Our experts are trained in this technical are of taxation and engineering-based approach of constructing your facility.
  • Our consultants have researched all the highly technical court cases, IRS rulings and procedures as they relate to cost segregation.
  • Our professionals can read and interpret blueprints and specifications.
  • Our team has performed thousands of studies ranging from warehouses to highly automated processing plants.
  • We build strategic alliances with CPA firms with engineering support to complete outsourcing.
  • We have experience in dealing with IRS audits as it pertains to asset allocations.

           We've saved millions of dollars
                               for businesses like yours!


The following is an example of the “breakout” process that takes place during the analysis of electrical components during a cost segregation analysis. The first step is to compare the panel information obtained in the field to the drawings to ensure that no changes have occurred since they were installed.  In similar fashion, the circuits are identified and reviewed against the schematics.

The example below shows the circuits that were identified and applied toward the assets that were in place at the time of the study (highlighted cells indicate circuits dedicated to §1245 equipment): 

Electrical Room        

           UL = Unlabeled
Panel HP      225 Amps

120/208V  3P/4W    

  C    S = Spare
  PA Description PA      B = Blank (Not Used)
1  1/20 Lights Lights  1/20 2    
3  1/20 Lights Lights  1/20 4   Standard Formula 
5  1/20 Lights Lights  1/20 6   Total Amps or Total Circuits =  940
7  1/20 Lights Lights  1/20 8   Dedicated Total = 480
9  1/20 Copy Machine Receptacles  1/20 10    
11  1/20 Coffee Maker Receptacles  1/20 12   Percentage of Panel = 51.06%
13  1/20 Refrigerator Hot Water Heater  2/20 14    
15  1/20 Disposal Hot Water Heater   16   Notes:
17  1/20 Site Lights Site Lights  1/20 18    
19  1/20 Site Lights Site Lights  1/20 20    
21  1/20 Site Lights Site Lights  1/20 22    
23  1/20 Ice Maker  Receptacles  1/20 24    
25  1/20 Vending Receptacles  1/20 26    
27  1/20 Vending Receptacles  1/20 28    
29  1/20 Receptacles GFI Counter Recept  1/20 30    
31  1/20 Receptacles GFI Counter Recept  1/20 32    
33  1/20 Receptacles Dishwasher  1/20 34    
35  1/30 Computer Telephone  1/20 36    
37  3/30 Air Conditioning Trash Compactor  3/30 38    
39   Air Conditioning Trash Compactor   40    
41   Air Conditioning Trash Compactor   42    

The next step is to compute the percentage of amps on each panel that are dedicated to §1245 property.   To do this, divide the total number of amps available on the panel into the amps dedicated to §1245 property (480 divided by 940 = 51.06%).  Locate the cost allocation for “panels and switchboards” on cost invoices supplied by the contractor.   Apply the amp percentage against the dollars on the panels and switchboard; the end result will be amounts that can be allocated to 5- or 7- year assets.

In this example, if the one panel and switchboard cost $100,000, the depreciable amount allocated to the equipment would total $51,060…and this is only one small part of the overall building process.