Our services enable you to "mine out" these buried tax savings from:
- New buildings presently under construction .
- Existing buildings undergoing renovation, remodeling, restoration or expansion.
- Purchases of existing properties.
- Office/facility leasehold improvements and "fit outs".
- Post-1986 real estate construction, building acquisitions or improvements where no cost segregation study was performed (even though the statute of limitations previously closed on the property construction/acquisition year).
Tell me more
Your real estate holdings may qualify for a Forrestall, Galeano & Li engineering-based cost segregation study. These IRS-approved studies help you accelerate income tax depreciation deductions, generating potentially significant tax savings. Many business owners routinely have real estate cost segregation studies done to save taxes and increase cash flow. For others, this may be a new concept to be evaluated cautiously, since the potential tax-saving results may seem too good to be true. If you're faced with a first-time decision about having a cost segregation study done, read these answers to questions we frequently receive from business owners like you.
Why hasn't my CPA told me about this?
Cost segregation studies employ engineering and cost-estimating procedures to identify shorter-lived assets qualifying for 5-, 7- or 15-year write-off periods, rather than the usual 39 years for building and acquisition costs. Most CPA firms don't have engineers on staff to physically inspect the property, examine architectural/engineering drawings and analyze cost data. Accountants may be able to capture some of the deductions, but without engineering expertise they may overlook substantial portions of a building to achieve tax savings.
What are our qualifications?
Forrestall, Galeano & Li CPAs is in partnership with BKD, one of the largest cost-segregation service providers in the United States, having a dedicated team of 10 engineers on staff to conduct these studies. Their combined cost segregation experience adds up to more than 125 years. and BKD has been performing these studies since 1992. Each year BKD performs hundreds of cost segregation studies across the nation, working with nearly 100 CPA firms.
How much does it cost, and what return can I expect?
The cost of the study will vary depending on the project and the available documentation. In general, clients routinely receive present value cash-flow savings at least 10 or more times their investment for the cost segregation study. In addition, you may be eligible to receive sales/use tax benefits, property tax relief and other credits and incentives.
What are the upfront costs?
We don't commit to performing a cost segregation study without providing a free initial evaluation and cost proposal to you. From that, both you and Forrestall, Galeano & Li can evaluate the cost vs. savings factors up front before any work begins. As CPAs, it's our nature not to initiate projects like these unless they provide value for your business.
Do these studies raise red flags with the IRS?
Engineering-based cost segregation studies to classify depreciation are an accepted standard approved by the IRS. Our experience in conducting successful cost segregation studies means yours is likely to withstand IRS scrutiny and to capture the costs that will earn you tax benefits. We also can help you file the necessary IRS paperwork to help you obtain your tax deductions.
What types of property are good candidates for these studies?
- New buildings presently under construction.
- Existing buildings undergoing renovation, remodeling, restoration or expansion.
- Purchases of existing properties.
- Office/facility leasehold improvements and "fit outs".
- Post-1986 real estate construction, building acquisitions or improvements where no cost segregation study was performed (even though the statute of limitations previously closed on the property construction/acquisition year).
To learn more about the paybacks of Forrestall, Galeano & Li's engineering-based cost segregation studies, please contact us.
