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Every year commercial property owners overpay their taxes because they are missing out on a legally allowable deduction for depreciation.
The practice of cost segregation accelerates depreciation schedules for commercial real estate buildings and assets. By utilizing cost segregation, businesses can realize substantial tax savings that begin in the very first year, and extend through the life of the asset. Most commercial properties and assets use a straight line depreciation method for a life of 39 years. The use of cost segregation lets you reclassify up to 50 percent of the total costs restructuring the property into depreciation classes as low as 5 years-and saving 22 cents on the dollar in taxes.
Why a specialist is needed
For both new and existing properties, the IRS requires that engineering-based cost segregation studies be performed in order to realize the maximum depreciation benefits. Engineering-based cost segregation studies provide more precisely segregated property information, giving CPAs the information and detailed supporting documentation they need to meet with strict IRS regulations and requirements for audit defense.
The professionals at Business Incentive Solutions have years of experience across a broad spectrum of real estate management and construction, along with a thorough understanding of current IRS cost segregation laws. Our diverse range of skills and experiences allow us to provide you with the ideal cost segregation strategies for your particular business, and ensure that your depreciation deduction benefits are maximized.
Here is a brief list of commercial property types that qualify:
Assisted Living; Apartment Buildings; Automobile Dealerships; Fitness/Health Clubs; Golf/Resorts Heavy; Manufacturing/Processing; Hospitals/Medical Office Buildings; Hotels and Motels; Light Manufacturing; Office Buildings; Restaurants (single or multiple); Self Storage Facilities
ESTIMATE OF SAVINGS
Using a Cost Segregation analysis of a commercial property BIS completes an “estimate of savings” for our client. These “savings” can be applied to offset federal tax liability and can be significant.
Advantages of cost segregation include the value of front-loaded depreciation deductions, write-offs of building components that need replacement and lower local realty-transfer taxes.
Read about: The Benefits of Cost-Segregation Studies here
Targeted tax credits are federal and state authorized incentives to implement public policy.
Not all pieces of a building are created equal.
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