Tax reduction and tax deferral are the primary benefits of obtaining a cost segregation study. Tax reduction occurs since more income is taxed at the capital gains rate instead of the ordinary income rate. Tax deferral occurs since depreciation is accurately taken in the early years of ownership. Additional benefits other than tax reduction are more accurate accounting, obtaining a book value for assets which may become worthless (tenant improvements for a financially unstable tenant) and an accurate method of tracking the cost basis and depreciation for all tenants. Tax reduction is the most meaningful and least understood benefit of cost segregation. Consider the following example of how to convert income taxed at 35% to income taxed at 15%: Can you remember when you last had a wonderful, relaxing vacation? If it's been a while, you may want to consider taking another holiday sooner than later. Why? Because vacations and holidays are playing a more and more important role in people's mental and physical health We had to make a choice fly or drive? With the economic situation and a tight budget by driving we could save a few bucks, but the choice was easy, driving seemed more interesting. We had the car looked at for any potential mechanical problems and after replacing a fan belt and transmission seal we headed out on our road trip to Los Angeles to visit friends. Our first top heading west was Saint Louis and the great arches. (Gateway to the West) I had been there 5 years ago with my son but my wife had never seen them, they truly are an inspiration to man's technological achievements. After a trip to the top and a stretching and walking break we pushed on to a city just east of Tulsa, Oklahoma for our first nights stay
