Cost Segregation
In light of the recent isolation mandates and closing of business establishments, we can all foresee nationwide occurrences of cash flow loss. Our Engineering Based Cost Segregation Studies can provide immediate cash flow solutions averaging $50K to over $100K through tax savings for commercial property owners and/or lease hold improvements to see us through these challenging times.
What is Cost Segregation?
Cost Segregation is the process of identifying and analyzing commercial building components that are eligible for accelerated depreciation on a property and/or renovations into shorter depreciation categories such as 5-, 7-, 15-year rather than the conventional 27.5- and 39.5-year tax lives. Accelerating depreciation lowers taxable income which then reduces the amount of taxes owed by commercial property owners. This tax strategy provides a significant tax benefit for the taxpayer, which increases cash flow in accordance to time valued money (TVM).
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Here are some Tax Strategies and Qualifications that might be beneficial to you:
Cost Segregation (Engineering-Based) benefits anyone who has done any of the activities listed below in the last year (or plans to do so), on a commercial property with a total cost basis over $250,000, including any improvements, and was placed in service after 1986. Our studies include the building system valuation to assure compliance:
- Purchased or built a new property
- Remodeled, renovated or expanded existing space
- Completed any kind of retrofit
- Completed a 1031 exchange
- Completed any other type of property changes
- 100% Bonus Depreciation – benefits anyone who acquired, constructed or renovated property that was placed in service after Sept 27th, 2017. All of the tax savings are available as cash flow in the same tax year the study is applied.
- Partial Asset Disposition (PAD)/Removal Cost - (Write Off vs. Accelerate) benefits anyone who improved, removed, demolished or disposed of property components through a renovation or expansion, or plans to do so. If they owned or leased the property the prior tax year, they can write off the qualified improvements rather than just accelerating the depreciation(No Recapture). This only applies if the write off occurs in the same tax year as the improvements. This is a “Use It or Lose It” benefit.
- The New CARES Act Allows for a Five-Year Carryback of Net Operating Losses (NOL) arising in 2018, 2019, and 2020. The New CARES Act -Allows NOLs to offset 100% of your income and it allows you to carry 100% forward or back.
Impact: When an engineering-based Cost Segregation study is applied, large depreciation deductions may be taken as a NOL in 2019. You can carry back this loss for five years and apply it to the gains made in those years.
Result: When your tax professional applies these calculations to your 2019 return, this could result in a tax refund now (A Refund Check) providing cashflow in a time of need.
ComplImentary Property Analysis
By completing a complementary analysis of your commercial property, you can identify what tax benefits apply to you. You may even qualify for a 100% Bonus Depreciation, or by applying the New CARES Act may possibly receive a Tax Refund Check. Click the link below to get started.
There is no cost and no obligation to find out how much a Cost Segregation Study can save you in taxes. Please complete the form and click “Submit." You will receive a confirmation email. No reply is needed, and you will receive your analysis shortly.
If you prefer, we can talk briefly over the phone and I will get the information needed to begin. We will work closely with you and your CPA and can even free up the CPAs time by preparing the Change of Accounting Form 3115 if applicable.
Please call me at your earliest convenience. If you'd rather email or text me your phone number along with a convenient time, I’ll be happy to call you instead.
See Your Potential Savings
Below is a link to our Complimentary Property Analysis Request Form. There is no cost and absolutely no obligation to get an analysis of your property that gives you an estimate of how much you can save when a Cost Segregation Study is applied to your taxes. Please complete the form and click “Submit” to send the information to me so that I can get an analysis of your property and potential tax savings to you as soon as possible. You will receive a confirmation email after you submit the form. There is no need to reply to this email, I will follow-up with your analysis shortly.
