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Cost Segregation Explained: Why Many Self-Storage Owners Are Taking a Second Look at This Tax Strategy
['Heidi Henderson', 'Executive Vice President', 'Engineered Tax Services']
insideselfstorage
In the right circumstances, cost seg can create significant tax deductions, improve cash flow and help you recover capital faster.
Cost seg is an engineering-based analysis that breaks a property into its individual components and identifies items that can be depreciated much faster.
For investors actively acquiring self-storage, expanding operations or making significant improvements, the return of 100% bonus depreciation can dramatically improve after-tax cash flow.
Based on the owner's tax situation, the projected tax savings were approximately $421,200.
While larger portfolios can produce bigger deductions, many single-facility owners benefit from cost seg as well.