In a nutshell, Cost Segregation is an IRS-approved application in which commercial property owners can accelerate depreciation of certain assets. They can do so by re-classifying property assets from a standard 39 year depreciable life to a 5, 7, or 15 year depreciable life. In my experience, “Engineered Based Study” is the best & only way to take advantage of this fully. Integrity Business Solution Provider LLC does an Engineered Based Study and can definitely help determine how much value implementing a Cost Segregation program might have.
What items qualify according to the IRS?
A number of assets could be eligible for reclassification that could result in tax depreciation, including
AND MUCH MORE!!!
Is Cost Segregation something I can take advantage of?
In my experience, virtually every taxpayer who owns, constructs, renovates or acquires a commercial real estate facility stands to benefit substantially from having a Cost Segregation study performed.
Why don’t people leverage Cost Segregation strategies?
As with many things, many people just aren’t aware of the benefits it could provide. Maybe their tax advisor doesn’t know about it either, so they may not realize they’re missing out on the opportunity.
Some believe that conducting a cost segregation study will trigger an audit. This is simply not true as the IRS has guidelines for developing such studies that are part of the IRS audit techniques guide.
Why does it cost so much to do Cost Segregation?
A Business Owner / Top Level Executive might think that conducting the Cost Segregation study is too expensive, which very well may be true in almost ALL circumstances. ($30K+) These studies could potentially uncover significant amounts of money and are, in a lot of cases, worth every penny. BUT WAIT!!! Why pay ANY upfront fees if you don’t have to??? I recommend doing the study only if the company doing the study does it on a CONTINGENCY BASIS ONLY. Let them put their money where their mouth is before you pay anything. ( Integrity Business Solution Provider LLC )
Cost Segregation Case Study Example
Now that you know what Cost Segregation is and whether it would be a good fit for you, you’re probably wondering what it looks like. I was doing some research on line and came across this Cost Segregation Case Study. This is a study that was recently performed on a commercial building with a purchase price of $2,900,000.00. The results are Eye Opening!!!
- An increase in depreciation in the first 5 years of $447,596.00
- A year 1 return on investment of $123,512.00
- A total tax benefit of $123,512.00
When it Pays to Look Back
There are also studies that look back on previous years and are useful to those who purchased or constructed commercial real estate prior to the current tax year and did not take advantage of accelerating the depreciation at the time the improvements were made. The IRS allows property owners to develop a Cost Segregation study in order to determine the depreciation that should have been realized at the time of completion or at the time of purchase. A few things to know:
- The difference in accelerated depreciation and the actual depreciation taken is realized in the following tax year.
- There is no need to file amended tax returns.
- The IRS does require the owner to file a simple 3115 form, which is a change of accounting method.
Take The Next Steps
Please reach out to me and I will set up your NO OBLIGATION, 15 minute “Discovery Call” with Integrity Business Solution Provider LLC and they will explain their AMAZING, on a Contingency basis only, program that will put money back into your BOTTOM LINE!!!
YOU REALLY HAVE NOTHING TO LOSE & EVERYTHING TO GAIN!!!
Also, Please forward this message to ANYONE you feel could benefit from this Contingency Based Cost Segregation study from IBSP!!!
Written By: Maury Sasso
Email – email@example.com