By: Donald Archer

The most oft-asked question I receive is, “How much can we save by doing a cost segregation study?” While I can’t predict the actual cash flow increase, I have developed a pair of estimating tools that can provide a “ball park” approximation to answer this question. First is the cash flow spreadsheet (many of you are familiar with) that we have used for several years. A working prototype of this programmable table is available at our web site here. Albeit somewhat limiting in that only one distribution combination is available at a time. A second tool that we have used for some time is the reclassified depreciation table for individual businesses such as that provided below. The information has been accumulated from over six hundred studies we have performed over the past ten years and are intended to give you a tool when asked about the benefits of a cost segregation study by your clients.

While these percentages do not represent hard and fast values, they do provide an accurate range of the total cost of the components that will be reclassified from real property to personal property and, hence, be subject to accelerated depreciation.