Cost segregation studies for buildings in New York City and New Jersey.
Highbridge Studies is a New York firm that prepares cost segregation studies for owners of multifamily, mixed-use and commercial property. We work only in the New York metropolitan area and New Jersey, which allows us to visit the buildings we study and to understand them as they are actually built.
A cost segregation study identifies the components of a building that the tax code allows to be depreciated over five, seven or fifteen years rather than over the life of the structure. Done properly, it is a detailed and well-documented piece of work. Done casually, it is a liability. Our studies are prepared with the expectation that every classification may one day need to be explained, and they are written so that it can be.
Our approach
Two things distinguish a Highbridge study. The first is how thorough it is. We document the site visit on video with a running narrative, so that every observation is captured at the source rather than reconstructed later from notes. That record, together with the closing documents, plans and cost records that already exist for the building, is analyzed with software we developed for this purpose and then reviewed line by line by the preparer. The result is an extremely comprehensive analysis: every component that can be supported is identified, and the support is in the report.
The second is how little it asks of the owner. Your involvement is limited to a short conversation about the property, the documents you already have, and access for the site visit. The rest is our work. Studies are prepared to the methods described in the IRS Cost Segregation Audit Techniques Guide and delivered in a form your accountant can use directly.
The process
A conversation
We discuss the building, how it was acquired or constructed, and when it was placed in service. If a study is unlikely to be worthwhile, we will say so. Otherwise you receive a flat fee for the work.
Documents and site visit
You provide what you have: the closing statement, plans if they exist, and any construction cost records. We visit the property and record it in full.
The report
You and your accountant receive the completed study: an asset-by-asset schedule with class lives and authority, the methodology, a photographic record, and a fixed-asset schedule prepared for the return. Studies are generally completed in a matter of weeks.
Compared with national firms
Most cost segregation studies in New York are prepared by national firms working from a distance. The comparison below is general, but it reflects how the work is typically organized.
| Typical national firm | Highbridge Studies | |
|---|---|---|
| Your point of contact | A sales representative, then a client portal | The person preparing the study |
| Site visit | Often virtual or subcontracted | Conducted by the preparer and recorded in full |
| Cost data | National unit-cost databases | The building's own records where they exist, supplemented by published cost data |
| Owner's involvement | Intake forms and portal uploads | A conversation, existing documents, and access to the building |
| Turnaround | Commonly one to two months | Generally a matter of weeks |
| Geography | Nationwide | New York and New Jersey only |
Property types
Questions
- Does my building qualify for a cost segregation study?
- Most income-producing property in New York and New Jersey qualifies. Whether a study is worthwhile depends on the depreciable basis, the building type, and how long you expect to hold the property. A brief conversation is usually enough to say.
- I purchased the building several years ago. Is it too late?
- No. A look-back study captures the depreciation that has not yet been taken. It is applied through a change in accounting method, and prior returns are not amended.
- How much of my time will this require?
- Very little. An initial conversation, the documents you already have from the purchase or construction, and access to the property for the site visit. Everything else is handled by Highbridge.
- Do you prepare or file tax returns?
- No. Highbridge prepares the study and the fixed-asset schedule. Your accountant applies it to the return.
For accountants
Fixed-asset schedules are delivered in the format you work in, with each classification tied to the photographic record and its authority. For look-back studies we provide the supporting schedules for the change in accounting method. Questions during filing season are answered by the preparer. Accountants who would like to discuss referring clients may write to [email protected].