As 2013 draws closer, news reports about “taxmageddon” and “taxpocalypse,” describing expiration of the Bush-era tax cuts, are proliferating. Many taxpayers are asking what they can do to prepare. The answer is to prepare early. September may seem too early to be discussing year-end tax planning, but the uncertainty over the Bush-era tax cuts, incentives…
What Methodology is Required by the IRS for Cost Segregation? Neither the Service nor any group or association of practitioners has established any requirements or standards for the preparation of cost segregation studies. The courts have addressed component depreciation, but have not specifically addressed the methodologies of cost segregation studies. The Service has addressed this…
The Cost Segregation Audit Techniques Guide was developed specifically to assist IRS examiners in their review and exam of cost segregation studies. It was NOT, as many believe, developed to help cost segregation firms, or the layperson, perform a cost segregation study. It’s primary goals are to help these examiners understand: why cost segregation studies…
A taxpayer may prepare cost segregation look-back studies on existing assets and re-calculate the depreciation for prior tax years based on the reclassified asset costs. The IRS-Approved process for a taxpayer to change accounting method is the timely filing of Form 3115 (Request for Change in Accounting Method). Per Rev. Proc. 2002-9, 2002-3 IRB 327,…
How do I calculate depreciation recapture? Let’s take a look at the process. 1) Review the original price paid for the asset being sold. For example, let us say you are selling a commercial property purchased eight years ago for $500,000. 2) Add the depreciation expense claimed each year you owned the property. Suppose, for…
Cost segregation services benefit commercial property owners in many ways. How you ask? Well, let’s look at a brief list: 1) Cost segregation accelerates depreciation 2) Cost segregation reduces income tax burden 3) Cost segregation increases cash flow 4) Cost segregation reduces real estate taxes 5) Cost segregation reduces property insurance premiums 6) Cost segregation…
What do cost segregation services include? Quality cost segregation services include, but may not be limited to, these attributes: 1) Engineer-conducted site analysis and survey 2) Photographic or video documentation of the building and site components 3) Engineer-conducted analysis of all construction drawings 4) Engineer-conducted analysis of building/site appraisal 5) Engineer-conducted analysis of all data…
Cost segregation increases debt-service coverage every time it’s applied. By applying cost segregation to any method of financing there will always be an increase in debt-service coverage…sometimes by 3:1 or more. In today’s shaky economy, when bank loans are nearly impossible to negotiate even for the best of credit risks, cost segregation provides the needed…
Pre-Construction planning benefits from cost segregation. Regardless of the type building being contemplated to construct, cost segregation should be among the first considerations. The reason is simple…cost segregation delivers results. When cost segregation is applied during the design phase of a building, many components that would normally be considered real property “become” tangible personal property.…
Cost segregation delivers another great ROI! A prominent Orthodontist engaged a cost segregation study of his thriving dental professional’s facility in Kissimmee, Florida. He wanted to maximize his depreciation and cash flow by determining what assets qualified for the Modified Accelerated Cost Recovery System (MACRS) method of depreciation.
If you own Commercial Property, including leasehold improvements or rental houses, that was damaged or destroyed by the recent natural disasters, we can help you maximize your Federal tax benefits, saving you tens of thousands of dollars. You must act now before rebuilding. FREE consultation and benefit analysis. It’s your money, why wait.
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A member of our Disaster Recovery Team will contact you within 48 hours to initiate your tax credit.
