Thriving in Real Estate: Applying Black Friday Wisdom to Transform Your Investments with Cost Segregation
As we approach the holiday season and the renownedBlack Fridaydeals, a parallel emerges between retail and real estate investment.The Black Friday story, where stores transition from losses to profits, holds valuable lessons for investment property owners aiming to end the year on a high note.
Amid economic uncertainty, high inflation, and rising interest rates, your dollar does not have the leverage it used to. Utilizing a cost segregation study for your investment properties can be a game changer.
Like a shrewd Black Friday shopper examining discounted items, cost segregation.....
Critical Mistake: Choosing a Provider by Price and Google Ranking
When you Google search keyword 'Cost Segregation' - most of the cost segregation providers on the first two pages of the search results including 'sponsored ads' provide a Tier 3 or 4 study. These Cost Segregation providers tend to cherry pick the easy items and bundle the rest into straight-line categories (these are lower tiered studies). As a result, they leave your valuable tax savings on the table, instead of in your pocket as additional tax write-offs. In fact, they are not counting each and every component of the property. Lastly, these studies tend to get scrutinized in the event of an audit. Buyer Beware!
For over two decades the Cost Seg America team has provided a Tier 1 study, the highest and most thorough study approved by the IRS, to fully maximize your benefits. Our study offers the highest level of audit protection because we itemize each and every component of the property.
Cost Segregation on a Veterinarian Office $453,718 in 1st Year Tax Savings!!!
Our client purchased a $1,359,251 Veterinarian Office and had a cost segregation study performed after purchase. Without a cost segregation study, the veterinarian office would have generated a 1st year depreciation of $34,852 using straight-line depreciation; but our client and his CPA were elated to accelerate $453,718 in the first year, roughly 33% in accelerated depreciation. Our client was able to significantly reduce their Federal income taxes and increase their bottom line.
1st Year tax write-off using Cost Segregation: $453,718 1st Year tax write-off without Cost Segregation: $34,852
Increase Your Cash Flow
Cost segregation helps you depreciate components of your property faster, than normal straight-line depreciation, which substantially decreases your federal tax liability and increases your cash flow. There are assets of your property that can be accelerated in 5 years, 7 years, or 15 years instead of the traditional 27.5 or 39 year straight-line depreciation. This frees up cash for other investments or simply puts more money in your pocket.
The Cost Seg America team typically finds 6-15% more in total depreciation than lower priced cost segregation providers. This equates to $60,000-$150,000 more in total write-offs on a $1,000,000 investment property working with the Cost Seg America team, instead of other cost segregation providers.
"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."