Indiana Jones and the Art of Cost Segregation

     Indiana Jones might be best known for his whip-cracking action and daring escapes, but a closer look reveals a strategic approach to his treasure hunting endeavors. In the world of finance, cost segregation is a similar strategic practice employed by real estate investors to maximize their tax benefits.

Understanding Cost Segregation:
     Cost segregation involves identifying and classifying different components of a property for tax purposes. By breaking down a property's assets into various categories, such as land, buildings, equipment, and even historical artifacts (LOL), investors can accelerate depreciation deductions and potentially reduce their tax liability.

Hidden Treasures and Tax Benefits:
     In Indiana Jones movies, our beloved hero often encounters hidden treasures, ancient relics, and valuable artifacts during his adventures. Similarly, cost segregation can unveil hidden tax benefits within a property. By identifying and properly classifying valuable components, investors can claim accelerated depreciation, resulting in substantial tax savings.

In-house Engineers and Construction Experts

     Our engineers and construction experts are full-time employees and will work on your case from start to finish. Instead of spending precious time filling in third-party contractors  every step of the process, your engineers know exactly what's happening and what needs to be done. We are proud of our team and only hire the absolute best in the business.

Meet Our Team - Jason Baker, CSA Representative

Recapture - It's Nothing To Be Afraid Of!

     In fact, "Recapture" is an important part of any Tax Planning process. Recapture is nothing more than the IRS requiring the taxpayer pay ordinary tax rate rather than Capital Gains rate on the gain attributed to depreciation deductions when selling your property. Simply stated, if you sell your property at a gain, you will pay back the depreciation taken on the property - up to the amount of the gain - at an ordinary tax rate or a rate higher than Capital gains rate. This is true for "Real Property" (1250) as well as "Personal Property (1245 property).

     Another way to look at it is you have received an interest free loan from the Government through depreciation deductions; and if you make money on this when selling the property, the Government is requiring you to pay ordinary tax rate on the money you made from this "loan". If properly planned it is still a win-win situation for the Commercial Property Owner!

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"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."