How to Get Cost Segregation Approved

Cost segregation is the process of allocating part of your building’s cost to its individual components. It’s a tax-advantaged way to reduce your property taxes. Sounds easy, right? Not so fast! There are a few things you need to keep in mind before starting the cost segregation project. Here, experts from Riveside TACS show you how to get cost segregation approved in three easy steps.

 

The basics of cost segregation

Cost segregation is the process of allocating a percentage of your building’s total cost to specific parts of the structure, like land and improvements to it, or operating systems. It’s a way to reduce your property tax bill.

Riveside TACS experts share the three basic steps for applying for cost segregation:

Step 1: Get approval from the local assessor,

Step 2: List all components on your property that you want to be part of the cost segregation project,

Step 3: Fill out your cost segregation application form.

 

Why do you need to get it approved

Riveside TACS experts indicate that cost segregation doesn’t happen overnight. Before you start the process, make sure to follow these three easy steps:

1. Research your building and compile a list of its individual parts.

2. Get a quote from an independent appraiser to get your property reassessed (this is separate from your property taxes).

3. Submit the cost segregation application and submit it for approval.

Some items in your building, like the roof, may not be subject to cost segregation because they don't fall under a specific category of real estate like land, buildings, or fixtures. This means that you can't bill them as part of the cost segregation process. If this is the case for you, make sure to include those items in your overall estimate at the top of the form so that you're submitting the most complete information possible.

Experts at Riverside TACS can guide you through the costsegregation process.

 

How to get it approved.

When you're ready to start your cost segregation project, you'll need to apply for a cost segregation study. The application process varies depending on the type of project, but it typically takes about four to six weeks.

The application will ask you:

1. What percentage of the total building costs will be allocated to individual components?

2. What is your business's target market?

3. How many square feet will each part of the building occupy?

4. What is your property's value?

5. Which tax year are you applying for?

6. If applicable, what is your building's age and construction type?

7. If applicable, what are the results of all other recent studies performed on the property?

 

Contact the experts at Riverside TACS to help you minimize tax and maximize returns.

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