Thousands of cost segregation studies have generated hundreds of millions of dollars in federal income tax savings nationwide.
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Bonus Depreciation is a specialized type of cost segregation. Cost Segregation, in the broader sense, is a process where a commercial, for-profit venture may identify or segregate the personal property assets and the structural component of a property for the purpose of more accurately detailing their respective tax depreciation.
In its current form, Bonus Depreciation, as established by the Tax Cuts and Jobs Act of 2017(TCJA), is a tax incentive provided by the government that allows an owner of a for-profit commercial asset to immediately deduct a large percentage of the purchase price of eligible assets acquired or constructed within the mandated time frames, thereby significantly accelerating depreciation. However, to be eligible, the asset must be purchased or constructed after September 27, 2017, and/or before January 1, 2023.
Ability to recapture under-reported depreciation from past years.
Beyond the benefits of enhanced cash flow, a quality cost segregation analysis can be a key component in keeping you compliant with IRS regulations. In addition to breaking out all short-term depreciable items, O’Connor is a cost segregation company that routinely provides a breakout of all existing Units of Property per the 2014 IRS Tangible Property Regulations.
Assets are reviewed and selected improvements (Tangible Personal Property and/or Land Improvements) are depreciated over 5, 7 or 15 years, rather than 39 years for commercial property or 27.5 years for apartments. The identified short items are depreciated via either 200% declining balance (5 & 7 year assets) or 150% declining balance (15 year assets) thereby further enhancing your depreciation.
NOTE: The above listed results are based on the use of 100% bonus depreciation as outlined in the Tax Cuts and Jobs Act of 2017, and is based on taxpayers falling in the 37% tax bracket.
We work with your CPA
Once the decision to proceed has been made, O’Connor team members will work closely with you and/or your CPA or financial/tax manager to collect existing data and documents regarding the subject property. To prepare your report, an appraiser inspects the property, identifying eligible items, then calculates their value and distributes each to its correct depreciation life, according to IRS rules and Federal Tax Courts decisions.
Next, we issue a final report, providing detailed cost allocations for the individual 5, 7 and/or 15-year classifications, along with the 39 or 27.5 year classifications. The latter are broken out into the nine “units of property” called out in the 2014 IRS Tangible Property Regulations.
Here’s How OUR Process Works
Tax savings delivered for our clients 160,000,258
First we seek to understand the client’s needs and magnitude of tax pain and review properties available for cost segregation.
O’Connor & Associates works closely with you and/or your CPA or financial/tax manager to collect existing data and documents regarding the subject property.
An appraiser inspects the property to identify eligible items, then calculates their value and allocates each to its correct depreciation life, per IRS rules and Federal Tax Courts decisions.
Expert Cost Segregation Company
O’Connor’s cost segregation division focuses only on cost segregation studies for its commercial clients. Our trained Cost Segregation Specialists perform cost segregation studies servicing all 50 states as well as international clients. We’ve completed thousands of reports generating hundreds of millions of dollars in federal tax savings for our clients. Our team of cost segregation specialists is made up of experienced, trustworthy professionals providing:
Outstanding Customer Service
Quality Technical Work
Undivided Cost Segregation Focus
O’Connor Cost Segregation team members typically utilize an engineering-based approach to our studies which is the IRS preferred methodology. Our team will interface with you to answer all of your questions about cost segregation and will assist you in determining if a cost segregation study will be of benefit to you. One of the key components in this process is a preliminary estimate of potential benefits.
Your O’Connor team will provide, at no charge and with no obligation, a preliminary analysis that will estimate approximate savings for your asset based on studies previously completed on similar assets.
These results will include a firm cost quote, allowing you to project a payback ratio of savings versus study cost prior to making any commitment to continue.
Serving All 50 States with Cost Segregation Solutions
Why O’Connor Cost Segregation?
We are cost segregation specialists! Our studies are IRS tested, CPA approved, and warrantied for the duration of your ownership of the asset studied! Satisfaction is guaranteed; if you are not satisfied, you do not pay.
Our studies are a key component in keeping you IRS compliant! O’Connor cost segregation studies not only detail all short-life components, but also provide a breakout of all Units of Property (UoP) as required in the recent IRS Tangible Property Regulations.
We can help you on assets you have owned for years! “Catch-Up” (C-U) studies allow you to claim previously under-reported depreciation from prior years without filing any amended tax returns!
IRS Approved and Compliant! Cost Segregation is a conservative, defendable, IRS-defined depreciation approach that will reduce your federal income taxes! Our warranty of the study is included in our flat fee study. Should IRS questions arise, we will defend our studies at no additional charge to you!
Accountant Friendly. We partner with your CPA or Tax Professional! Our advisors and appraisers interact with your accountant throughout the entire study process.
O’Connor is experienced and Professional! Our technical experts are state-licensed appraisers who have performed cost segregation studies on thousands of commercial assets nationwide.
Property Types That Benefit From
Cost Segregation Studies
Apartment Building Cost Segregation
Hotels, Motels, Hospitality
Medical /Dental Buildings
Assisted Living / Nursing Homes
Warehouse / Distribution
Auto Dealerships / Service Centers
Bank / Financial
Private School / Day Care
O’Connor means savings for business!
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CEO, Commercial Property Management and Investment Firm – Texas
"We instruct O’Connor & Associates to perform a cost segregation study as part of our standard operating procedures. The study is an integral part of our strategic tax planning process and has proven efficient, effective and valuable in reducing federal taxes to the appropriate level, therefore optimizing our overall strategy."
CPA, CGMA, Shareholder – Major CPA Firm – East Coast
We have worked with O’Connor and Associates for over 5 years. Their cost segregation experts have always provided great client service when performing cost segregation studies. They also provide excellent reports which can be used as support documentation for depreciation schedules and IRS audits. Their studies have saved my clients thousands in tax dollars!
CPA with Major CPA Firm – West Coast
This is the second year we have used O’Connor to deliver cost segregation services. My clients are sophisticated and very demanding large multi-unit residential owners with properties in several states. The O’Connor team of relationship manager, cost segregation manager and CPA confidently addressed all our needs throughout the process. They have become one of our key real estate advisors.
CPA, Atlanta-based Consulting Firm
As their CPA firm, clients expect us to seek out and utilize tools which will minimize their federal taxes. Cost segregation is an appropriate, conservative and cost effective tool to substantially reduce federal and state income taxes. Our clients have been extremely please with the results.