Owners of commercial property, rental residential property and/or leasehold improvements can now legally redirect their Federal and State tax dollars back to their business! This is done through the process of cost segregation. The alternative is to give your money to Uncle Sam and letting him manage it how he wants…YIKES!! Cost segregation is available to commercial property owners with holdings over $200K!
Cost segregation is an IRS approved tax strategy allowing commercial property owners to increase their cash flow and decrease their tax liability. A comprehensive cost segregation study frontloads depreciation deductions into the early years of ownership, thus capitalizing on the time value of money.
A deduction today is always going to be worth more than that same deduction five or ten years from now.
Cost segregation is the process of separating and reclassifying costs in a commercial building from the standard 27.5 or 39 year property to 5, 7 and 15 year property.
- For example: The carpeting in a commercial building can be reclassified from 39 year property to 5 year property, meaning the property owner can get all the tax benefits of accelerating the depreciation on this building asset.
So why isn’t every owner of commercial property utilizing cost segregation?
Many property owners are simply unaware of this tax strategy. Every year, thousands of commercial property owners overpay their taxes! Chances are your accountant is NOT “already doing that for you”. A proper cost segregation study requires knowledge in cost estimating, construction, and blueprint comprehension. Most accounting firms do not specialize in this area, however; a good cost segregation company will work hand in hand with the property owners accounting firm to make the final application of the study a turn key solution. A completed cost segregation study does not replace the important role an accountant plays in preparing tax documentation or determining tax liability.
Who qualifies for a cost segregation study?
Any property owner who has:
- Purchased or constructed a commercial building or facility after 1986
- Renovated, remodeled, expanded or restored an existing facility
- Paid for office or facility leasehold improvements
- Commercial residential property such as an apartment complex
Cost segregation can benefit owner’s of apartment complexes, assisted living facilities, auto dealerships, banks, casinos, car washes, fitness centers, gas stations, grocery stores, hospitals, hotels, medical facilities, office buildings, storage facilities, restaurants, retail centers and more.
Think of the benefits of cost segregation this way: If you were given a check for a million dollars and had to choose to either cash it now or in 39 years, what would you do? Well, most people would cash it now, because the time value of that money is worth more today than 39 years from now. This is the same idea with cost segregation.
By not doing a cost segregation study, commercial property owners are basically giving the IRS an interest free loan of money they could be using TODAY for their own benefit! They could pay down debt, purchase more property, invest it, or take a vacation. Educate yourself on this tax strategy!
Do you own commercial property? Would like to see what your savings would be? For a free projection of your tax savings from National Cost Segregation Specialists, contact us at 800.610.2774, or visit us online at www.natcss.com. We have performed thousands of successful, engineer based studies saving our clients hundreds of millions of dollars. We have a no loss record with the IRS and we provide ongoing IRS protection on every study! Keep you hard earned dollar in your pocket, cost seg your property!
Enjoy our video: Cost Segregation – Pay Yourself or the IRS