Turn 20-40% of Your Property Cost into Immediate Tax Savings
Average 1st year deduction is $171,243
I couldn’t be more pleased with the results. Their team was incredibly professional, prompt, and easy to work with. I achieved a highly favorable tax situation and recommend Seneca to anyone looking to maximize their tax benefits.
Boost business and property cashflow
Reduce or eliminate federal taxes
Invest in your next property faster
Engineering Team Highlights
Years Cost Segregation Experience
Cost Basis Analyzed
Properties Assessed
Solutions for Property Owners Seeking
to Maximize Incomes
Our cost segregation studies help you maximize your real estate investment incomes through IRS-approved tax savings. Here's how our service helps
Knowledge of Cost Segregation
Most property owners haven't heard of cost segregation. We exist so you don't miss out on potential tax savings just because you aren't familiar with the concept or how to conduct a study.
Reducing Your Tax Liability
We uncover property components that qualify for accelerated depreciation, reducing your tax burden due to slow standard depreciation.
Clearing Uncertainty About IRS Compliance
Cost segregation is legal, and we strictly follow the IRS Cost Segregation Audit Technique Guide. We ensure total Compliance to avoid the risk of an audit.
Improving Cash Flow
By helping you save on taxes, you pocket more of your property income, increasing your cash flows and financial flexibility.
Our Approach to Cost Segregation
Our cost segregation approach focuses on the following crucial aspects
We use an Engineering-based method to identify and classify building components to ensure accurate and defensible findings.
Benefits
Our primary focus is to maximize your tax savings by identifying components eligible for accelerated depreciation. You can enjoy reduced taxable income, increased cash flow, and improved financial performance of the property.
We comprehensively analyze your property to identify and reclassify different components, specifically focusing on those that qualify for 5-, 7-, or 15-year depreciation schedules.
We ensure each study complies with IRS guidelines so that it accepts the cost segregation study and results. We'll provide a detailed report supporting our findings and cost allocation to shorter-life components.
We take our time to understand each property, enabling us to customize our study to your specific needs for maximum savings.
We help you implement the findings effectively by liaising with you and your CPA. We are also ready to defend our study and report in the rare event of an audit.
How Our Cost Segregation Service Works
At Seneca Cost Segregation, we have a simple three-step process to unlock your savings.
Consultation
Quick and no friction. Schedule a consult and our team will present a no-cost estimate of savings and ROI available to you.
Virtual Site Visit
No more waiting. We collect a few documents, schedule a convenient virtual site visit, and do the heavy lifting to prep your study and report.
Unlock Tax Savings
Our engineers analyze your property and create your tailored report. We return a PDF and fixed asset schedule which your CPA will love.
Expert Cost Segregation for All Qualifying Property Types
If you are the owner of an investment property that is worth at least $450,000, or you have had $500,000 in improvements, and you plan to hold on to the property for 3+ years, you may be able to capture thousands in tax benefits.
Ready to Start Saving and Invest Faster?
What is Cost Segregation?
More depreciation = more paper losses = less taxable income = more money in your pocket
Cost segregation is an IRS-approved powerful tax planning strategy that allows real estate professionals that own short-term rentals (STRs), long-term rentals (LTRs), owner-occupied businesses, and/or commercial property to increase cashflows while generating paper losses that decrease taxes owed.
Typically Residential or Commercial properties depreciate in a straight-line (every year is the same amount) over 27.5 or 39 years.
Cost Segregation is an engineering analysis that breaks up the property into its component parts (cabinetry, fixtures, HVAC, fencing, doors, for example) and assigns depreciation over 5-, 7-, or 15-years which are eligible for additional first year bonus depreciation (currently 80% or 100%).
Depending on the property, as much as 20-40% or more of the building cost may be eligible for accelerated depreciation.
The Result: Depreciation can be front-loaded, resulting in a considerable increase in short-term cash flow and a reduction or even elimination of taxes owed.
Why work with Seneca Cost Segregation?
Cost Segregation is Our Specialty
We follow CSATG to a T and focus solely on Cost Segregation, working with your CPA and team to ensure a cost segregation study brings large savings to you and the process of attaining the study is painless
Deployed Across All 50 States
Our team is deployed across all 50 states and can perform remote (virtual) or on-site tours depending on the property, timing needed, and individual preference
Backed by Seneca AuditDefense
Every cost segregation study we produce is IRS-compliant and turned around quickly. In the unlikely event of an audit, we will defend them for you and refund the cost of the study with our Money-Back Guarantee
Meet Our Cost Segregation Specialists
At Seneca Cost Segregation, we have a dependable team of cost segregation specialists that includes
Engineers
Our Engineers use their expertise in building systems and construction to assess your property thoroughly to identify and classify components.
Cost Segregation Advisors
We have Cost Segregation Advisors who deeply understand cost segregation guidelines and IRS compliance. They ensure our tax savings recommendations can withstand IRS scrutiny.
Cost Segregation Analysts
These cost segregation professionals work with engineers and tax experts to ensure the accuracy of our component allocations, tax savings calculations, and final reports.
Dedicated Account Managers
You get a dedicated account manager who acts as your point of contact and helps you interpret the results of the study. They ensure the study is completed on time, within the agreed budget, and complies with IRS regulations.
Get the Tax Benefits You Deserve
Partner with Us
Get the Tax Benefits You Deserve - Partner with Us
Here's why you should work with us at Seneca Cost Segregation as your trusted cost segregation consultants to realize real estate tax benefits through accelerated depreciation
Identification and Classification Experience
Our studies have a low-risk profile for audits. We will defend our report and can even refund the cost of the study if an audit occurs and our study has a material issue.
Improved Cash Flows
Legally reducing your taxable income through tax savings means you pocket more money for future investments or personal use.
Streamlined 3-Step Process
We have simplified the complex cost segregation process into three easy steps. You won't be confused about what we do or your part.
Commercial and Residential Real Estate Coverage
We are cost segregation experts in all types of real estate you may own, from small single-family properties to office and industrial buildings.
Nationwide Coverage
We can perform studies of your building in any of the 50 states.
IRS Compliance
Our studies have a low-risk profile for audits. We will defend our report and can even refund the cost of the study if an audit occurs and our study has a material issue.
Frequently Asked Questions (FAQs)
Here are common cost segregation questions you may have
What's Included in Your Cost Segregation Services?
Our cost segregation services typically include the following:
- Initial Free Estimate: We provide an initial estimate of your potential tax savings and the return on investing in our service. With this, you can see whether the study is worth it.
- Property Inspection and Analysis: We conduct a thorough on-site or virtual property evaluation.
- Identification and Categorization of Assets: We identify and group various assets that qualify for shorter-life depreciation.
- Cost Allocations to Identified Assets: We'll allocate potential tax savings to qualifying assets.
- Engineering Report and Documentation: We compile a detailed report of the findings of the study, showing what's eligible and the corresponding tax savings. We can include diagrams, photos, and other supporting materials to back up the report.
- Audit Defense: We can defend our study if the IRS challenges it, including providing supporting documents or having our cost segregation specialists answer requests around our report and studies.
How Long Does a Cost Segregation Study Take?
Most cost segregation studies are typically completed in 2-4 weeks vs other firms which can take months.
The duration can depend on the complexity of the property and the availability of information from you or your CPA. We can always prioritize a study if you need it urgently.
Is Cost Segregation Risk-Free?
As much as cost segregation provides several benefits, the study has a few risks, including:
- An overly aggressive or poorly done study may lead to IRS audits, disapproved deductions, and possible monetary penalties.
- If you sell a property soon after the study, you may attract depreciation recapture tax on the accelerated depreciation deductions you've already enjoyed. It's best to hold the property for the medium or long term, at least five years after the study.
- You may lose money through an expensive study if you don't get an estimate of the potential tax savings first to ensure the study is feasible.
- Understanding passive income loss rules is important to know if you qualify to take your passive income losses and apply them to your ordinary taxable income.
How Much Can I Expect to Save with Cost Segregation Services?
Let's have a quick example to show how much you can save with cost segregation services.
- You purchase an investment property for $750,000 and put it into service on 12/1/2022. Our study identifies faster-depreciating property components worth $150,000, as below:
- 5-Year Property: $50,000 coming from things like carpeting, non-structural cabinets, appliances, decorative lights, and ceiling fans.
- 15-Year Property: $100,000 coming from things like landscaping and irrigation systems, outdoor lighting, fencing, two gates, and retaining walls.
With standard depreciation only, and assuming a tax bracket of 37%:
- The depreciation over 39 years would be $750,000 ÷ 39 years x 1 month (put in service 12/1/2022 = $1,602 in the first year and $19,694 per year after that)
- The tax savings with standard depreciation would be $1602 x 37% = $592 in the first year
With cost segregation and the same tax bracket of 37%:
- 5-Year and 15-Year Property: $150,000 identified. x 100% bonus depreciation = $150,000 in the first year
- 39-Year Property: $700,000 − $150,000 = $550,000. $550,000 / 39 Years * (1/12 months) = $1175
- Total additional depreciation in the first year due to cost segregation = $150,000 + $1,175 = $151,175
- The tax savings doing a cost segregation would be $151,175 x 37% = $55,934
From the above, the difference in tax savings due to cost segregation would be:
Tax savings with cost segregation − Tax savings with standard depreciation only = $55,934 − $592 = $55,342 in the first year, a 9300%+ difference
What Makes Seneca's Cost Segregation Services Stand Out?
Our services stand out for several reasons:
- Starting with Estimates: We first estimate your potential tax savings to showcase the ROI of the study's cost and to avoid wasting your time and money
- In-House Tech: We use proprietary tech built by our Engineers and tested for compliance to ensure precision, accuracy, and faster reactions to changes.
- Exceptional Customer Service: You'll have a dedicated account manager to contact with questions about the study or final report.
- Additional Services: Our help goes beyond uncovering possible tax savings. We offer complimentary tax assessments that help you unlock more savings from your properties, partnerships, businesses, and assets.
