Cost Segregation: Take Advantage of Tax Benefits That Were Extended or Made Permanent in 2015


Office and residential building owners and their tenants have long understood the value of depreciation expense in relation to cash flow. Depreciation expense is a deduction that reduces taxable income and thereby increases after-tax cash flow. Generally, the shorter the depreciation period, the greater the tax benefit derived. Factoring in the time value of money, larger deductions over a short period of time are far more beneficial than smaller deductions over a long period of time. This is true even though the total amount of deductions puts after-tax dollars in your pocket that can then be invested in something else or used to retire debt. Plus, there is an opportunity to increase those tax savings with certain tax incentives that were recently extended or made permanent.

This article will provide you with information on two provisions of the Protecting Americans from Tax Hikes Act of 2015 that may benefit building owners and how cost segregation may lead to greater cash flow. .

Contact at or (925) 296-1035 and at or (415) 677-4504 for more information on this topic or to assist you with your Real Estate tax needs.