A Cost Segregation Study is a strategic, IRS-approved tax-saving tool for farmers & ranchers.
According to the 2017 Census of Agriculture, the average U.S. farming operation owns or leases machinery and equipment that is valued at more than $133,000. For the largest quartile of U.S. farming operations, that figure soars to more than $414,000 in equipment value on a weighted basis. Across the U.S. agricultural sector, farmers are estimated to have collectively spent more than $23 billion on average per year between 2017-21 on vehicles and machinery, according to data collected by USDA’s Economic Research Service.
A Cost Segregation Study is a strategic, IRS-approved tax-saving tool and can be used by those who have constructed, purchased, expanded, or improved any kind of commercial real estate including ranches and farms
When purchasing a ranch or farm, taxpayers often allocate the vast majority of the purchase to the land and building(s) purchased. However, the taxpayer stops the allocation at that point and then depreciates the value assigned to the building(s) over 20 years for tax purposes. These farmers & ranchers are missing a major tax savings opportunity by not taking the allocation one step further. Rather than just assigning value to the building (and land), they should also assign value to land improvements, farm infrastructure, irrigation systems, feeding systems, roads, fences, HVAC systems, etc. While the land is not depreciable, land improvements can be.
Often, when having a cost seg study done, we can get your property taxes lowered too. The first step is to visit our site, take the 30-second survey, then set a call with us and bring anyone you wish to attend such as your CPA or tax preparer. It usually takes about 20 minutes and you can often get a refund check from the IRS in 3-5 weeks.