The 6 Levels of Cost Segregation Methodology Recognized by the IRS

     Real Estate Investors who acquire, construct, or rehab/renovate commercial real estate property (residential rental or income generating commercial property) can realize significant tax saving and increased cash flow via an engineered cost segregation study.

WHAT IS A COST SEGREGATION STUDY? 

     Cost segregation is a tax planning strategy of FRONT-LOADING qualified depreciation for a commercial property or residential rental property (including apartment complexes, rental homes, and Air BNB’s).

      This allows you to REDUCE your current federal income taxes and KEEP MORE OF YOUR MONEY in your business or your bank account instead of sending it to the IRS.

     Significant savings are hidden in the walls, floors, ceilings, parking lot & landscaping. Certain components previously classified with a 39 year or 27.5 year life, can be re-classified as personal property or land improvements; applying a 5, 7 or 15-year depreciable life utilizing cost segregation.

Benefits of Cost Segregation: 

·    An immediate increase in cash flow. 

·   A significant reduction in current federal tax liability. 

·  The ability to reclaim "missed" depreciation deductions from prior years (without having to amend tax returns). 

Equal Treatment of Components
 
     Every component of a property (straight-line and accelerated) has value in our eyes, no matter how small. Our detailed methodology assigns a value to each and every component in the building, whether the building is acquired or a new construction. 

     As a result of using our detailed methodology, you get maximum benefit from accelerated property and complete detail on the straight-line property components. Other methodologies tend to cherry-pick the easy items and bundle the rest, leaving valuable money on the table. 

Cost Segregation Working for our Client....

Did you Know?

An amended Tax return is no longer necessary to fix depreciation in prior years. In place of an amended return, the IRS has issued Revenue Ruling 2004-11, which allows a taxpayer to file a Form 3115 (Automatic Change in Accounting). This allows the taxpayer to take any missed deductions in the current year. So, if you have purchased a building in the last ten years, call us for a no cost proposal and you can apply the savings to this year's tax return. 

Employee Retention Credit Reminder

     Did your business stay open and retain W2 employees during the Covid-19 pandemic? If so, you may be eligible to claim Employee Retention Credits from the IRS. A business can receive up to $26,000 per employee ($12,000-$16,000 is the average). 

     It only takes a brief 15-minute call to see if you and your business qualify. Contact us today to arrange a no-obligation review. 

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."