Cost Segregation Studies
Cost segregation is a powerful tax strategy that allows property owners and real estate investors to accelerate depreciation on specific components of their buildings. By identifying and reclassifying assets into shorter depreciation schedules, you can significantly reduce taxable income, increase cash flow, and free up capital for reinvestment. At Wallach Management, we conduct IRS-compliant, engineering-based studies that uncover every eligible deduction—helping you maximize the financial potential of your real estate investments.
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See How Much You Could Save
20-40% Asset Reclassification
Reclassify up to 40% of your property into faster depreciation categories.
$1.8 Million Tax Savings
One investor realized almost $2M in tax savings from a $10K study.
$30-$90k in Extra Cash Flow
On a $1M property, cash flow increases can reach six figures.
Benefits of Cost Segregation
Accelerated Depreciation
Cost segregation allows you to shift eligible building components from the standard 27.5- or 39-year depreciation schedules to shorter timelines—often 5, 7, or 15 years. This means you can deduct a larger portion of your property’s value in the early years, providing substantial tax savings when cash flow matters most.
Increased Cash Flow
By accelerating depreciation, you reduce taxable income and keep more money in your pocket now—not decades from now. This increased cash flow can be reinvested into property improvements, acquisitions, or other revenue-generating opportunities, helping your portfolio grow faster.
Significant Tax Savings
A properly executed cost segregation study can save property owners tens of thousands—or even millions—in taxes over the life of the asset. These savings are realized immediately in the form of reduced current-year tax liability and can have a major impact on your overall investment returns.
IRS-Compliant & Risk Managed
When conducted by qualified professionals, cost segregation studies follow strict IRS guidelines, using engineering-based methodologies to ensure accuracy and compliance. This approach not only maximizes your deductions but also minimizes audit risk, giving you peace of mind alongside your savings.
Does Cost Segregation Make Sense for You?
You Own Commercial or Residential Rental Property – Cost segregation applies to almost any income-producing property.
You Recently Purchased a Property – The earlier a study is done, the faster you can realize tax savings.
You’ve Completed Major Renovations – Renovations often create new depreciable components that qualify for accelerated schedules.
You Paid Over $500,000 for a Property – Larger investments typically see the highest ROI from a study.
You’re Paying Significant Income Taxes – The more tax you pay, the more valuable the deductions become.
You’re Planning to Reinvest in Real Estate – Extra cash flow from depreciation can help fund new acquisitions.
Your Property Has Specialized Build-Outs – Items like lighting, flooring, or custom finishes often qualify for shorter depreciation.
You’ve Owned the Property for Less Than 15 Years – Even existing properties can benefit from a “look-back” study.
You Want to Maximize Current Cash Flow – Accelerated depreciation puts more money in your pocket now.
You’re Working with a Tax Professional Who Supports the Strategy – A CPA who understands cost segregation can help ensure you realize every possible benefit.
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How Cost Segregation Works with Us
Accelerate Your Depreciation
Tailored Strategies for Your Assets
Expert Guidance for Every Step
Maximize Your Returns
Why Business Consulting Matters
Maximizes Investment Returns
Cost segregation directly improves your property’s return on investment by boosting after-tax cash flow. The additional funds you keep in the early years can be reinvested into upgrades, debt reduction, or new acquisitions—helping you grow your portfolio faster and compound long-term wealth.
Enhances Tax Planning Flexibility
A cost segregation study gives you greater control over when and how you take deductions, making it easier to match tax benefits with your overall financial strategy. This flexibility is especially valuable for high-income years, major investments, or planned expansions.
Improves Cash Flow Timing
In business and investing, timing is everything. By front-loading depreciation, cost segregation ensures you have access to more capital when it’s most valuable—often in the critical early years of ownership when expenses are highest and growth opportunities are abundant.
Strengthens Competitive Position
Investors who leverage cost segregation can operate with more available capital, giving them an edge when bidding on properties, funding improvements, or expanding their holdings. This advantage can help you outpace competitors and seize opportunities they can’t.
Cost Segregation FAQ
Get answers to your most pressing questions about cost segregation and how it can benefit your real estate investments.
What is cost segregation?
Cost segregation is a tax strategy that allows real estate owners to increase cash flow by accelerating depreciation deductions. This process involves identifying and separating personal property components from real property, enabling faster depreciation schedules.Who can benefit from cost segregation?
Any real estate investor or business owner with depreciable property can benefit from cost segregation. This includes commercial properties, residential rental properties, and even certain improvements made to existing structures.How does cost segregation work?
A cost segregation study involves a detailed analysis of your property to identify components that can be depreciated over shorter periods. This study is typically conducted by a qualified engineer or tax professional who specializes in this area.What are the tax benefits of cost segregation?
The primary tax benefit of cost segregation is the ability to accelerate depreciation, which can lead to significant tax savings. By reducing taxable income, property owners can improve cash flow and reinvest in their businesses.Is a cost segregation study worth the investment?
Yes, a cost segregation study can provide substantial tax savings that often exceed the cost of the study itself. Many property owners find that the benefits far outweigh the initial investment, making it a valuable financial strategy.
Get Started with Cost Segregation
Contact Wallach Management today to learn how our cost segregation services can enhance your real estate investment strategy and maximize your tax benefits.