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Understand the Step-by-Step Process to Get Your Immediate Tax Refund with this Cost Segregation Real Estate Example


Many commercial property owners are overpaying on their taxes each year. Perhaps even you. If you are looking for a way to recoup prior overpaid taxes on this year’s tax bill, check out this cost segregation real estate example that will show you what to do.

The Little-Known Tax Refund Secret: Look-Back Studies

Look-Back Studies are the property owner’s secret to success with tax refunds. These studies reclassify eligible real property assets as personal property assets: a process known as “cost segregation.”

Since personal property has a significantly shorter depreciation timeline than real property, this IRS-approved practice helps you reclaim tax money from previously misclassified property. Best of all, this practice does NOT require you to amend your taxes – you simply need to fill out IRS Form 3115 to claim your tax refund as a payment against a quarterly tax bill this year.

Read over the following cost segregation real estate example to see how it all works:

  • Your Look-Back Study will begin when a team of fixed asset tax experts assesses prior cost capitalizations and purchase price allocations on your previously-completed renovations and improvements or acquisitions.
  • Next, this team will complete a comprehensive analysis of all building assets. For this, fixed asset tax experts and engineers will work together at your property to segregate out the total value of your building’s personal property, from the smallest wiring inside your walls to the landscaping and hardscaping outdoors. We find that property owners frequently overlook personal assets such as built-in cabinetry, specialty HVAC systems, AV systems, wall coverings, and network systems when they do these calculations without the help of engineers.
  • Next, your team will receive a detailed report that includes expert recommendations on reclassifying property components from real to personal assets to claim previous overpaid taxes. This report can also help you right-size and lower your property insurance premiums, resulting in a double savings for you.
  • Finally, you will use the findings in this report to take advantage of an approved IRS procedure called automatic consent. This lets you change your accounting method, so you can immediately claim the allowable depreciation amount you deserve. To do this, simply fill out IRS Form 3115, Application for Change in Accounting Method, and file it with your next estimated quarterly tax payment. This will entitle you to a quick refund check or a reduction on your future quarterly tax payments.

It really is that easy.

Act on This Cost Segregation Real Estate Example & Take Back Your Cash

Will you save on this year’s tax bill with a Look-Back Study? Consider this real-life cost segregation real estate example from one of our clients:

This client had previously completed an accounting-based cost segregation study on their $200 million HQ complex 6 years ago. They used another provider who did not include a team of engineers as part of the assessment. Their initial study found a total of 11.2% of personal property assets.

When our multidisciplinary team of experts reassessed those initial findings and included engineering-based cost segregation, we identified a solid 27.6% of 5-year double-declining balance personal property – all of which they recovered that very same tax year!

Learn How to Get Back Your Tax Overpayments This Year


Serving clients since 1985, Paragon International, Inc. provides independent, impartial and accurate cost segregation analyses, and property valuations and appraisals to assist in and support decisions related to taxes, risk management, investment, financing and corporate planning. Our consultants have extensive fixed asset experience – they’re fixed asset experts. Because of that we are able to offer a unique combination of irreplaceable human resources and advanced technology. We have specialists experienced in valuing closely held securities, patents and other intangible assets, business enterprises, buildings, equipment and real estate. In addition, Paragon provides complete inventory and asset management services and solutions, including software customization and training, barcode labels and scanners, and tailored inventory services such as data conversion and integration, asset inventories, asset policies, cost reconciliation, and appraisal services. Contact Paragon International to discover how we can help you.

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