Introduction to Construction Tax Planning

Construction Tax Planning (CTP) is a practice providing a pro-active approach, with early involvement in the design and planning phases to be able to change the character of some of the assets in order to convert them to tangible personal property.  This, along with an experienced understanding of architecture and design results in a greater tax benefit from accelerated depreciation compared to a traditional Cost Segregation approach. 

This approach allows the assembling of contemporaneous documentation from the professionals designing and constructing the building.  The courts have held that these professionals are ultimately the authority on what is “building” and what is “not building”.  An experienced approach is unobtrusive to the design and construction team and does not increase construction cost or slow down the schedule.

Typical NPV benefit for a building from the ground up (including interior improvements) is on the magnitude of 6% of construction cost (Excluding Land & FF&E)

An experienced CTP team consists primarily of licensed architects and engineers with MBA’s, who have had significant experience in the design professions.