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Newsletter 16 November 2023 |
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Newsletter 16 November 2023 |
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Triple Net Properties and Cost Segregation,
the Perfect Pair!
Triple Net (NNN) properties have become extremely advantageous to purchase due to their unique structure, where tenants are responsible for covering property-related expenses such as taxes, insurance, and maintenance. While this arrangement offers landlords a relatively hands-off approach to property management, it's essential to recognize that despite these advantages, property owners are still liable to pay federal income taxes on the rental income they receive. This is where the strategic utilization of cost segregation comes into play. Even in the context of Triple Net properties, where tenants shoulder the operational expenses, property owners can still benefit greatly from cost segregation by boosting cash flow, reducing current tax liability, enhancing ROI and planning for future expenses. |
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Charles has been helping people for the last 40+ years: from an acquisition specialist helping university libraries and individuals build special and rare collections to Cost Seg America, where he helps people find money in their buildings and save on their federal taxes. Charles is quite literally the Santa Clause of Cost Segregation!
Outside of CSA, Charles enjoys ballroom dancing, gardening, shooting sports, and spending time with his family, both 2-legged and 4-legged.
M) 904.704.3457 [email protected] |
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Charles has been helping people for the last 40+ years: from an acquisition specialist helping university libraries and individuals build special and rare collections to Cost Seg America, where he helps people find money in their buildings and save on their federal taxes. Charles is quite literally the Santa Clause of Cost Segregation!
Outside of CSA, Charles enjoys ballroom dancing, gardening, shooting sports, and spending time with his family, both 2-legged and 4-legged.
M) 904.704.3457 [email protected] |
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Cost Segregation on A Freestanding Retail
In 2022, our Client purchased a retail building in Colorado for $2,000,000. Using land allocation of $400,000, the depreciable basis was $1,600,000. If using the 39 year straight-line depreciation, the tax deduction would have been $41,026 per year. Our Client decided to engage the Cost Seg America team to perform a cost segregation study.
The Cost Seg America team was able to identify $747,496.46 of the asset costs to be reclassified over 5, 7 and 15 years (47% of the depreciable basis). By utilizing this study and electing 100% Bonus Depreciation, the client went from a $41,026 depreciation deduction in year one, to $747,496.46 depreciation deduction (or passive loss) in year one. Our Client is a Real Estate Professional, so this significant tax deduction was used against ordinary income. |
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www.costsegamerica.com 888-865-4401 [email protected]
"The information contained this newsletter is meant for guidance purposes only and does not in any way constitute legal or tax advice. Readers should seek advice from their CPA or Accountant in relation to information contained in these articles." |
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