WHAT CAN COST SEGREGATIONDO FOR ME?Cost segregation is a
powerful tax planning method that uncovers huge savings for owners
of commercial real estate.
The New York Times“By ignoring generous IRS guidelines
whenestablishing depreciation schedules, 90%of real estate
investors are unintentionally
overpaying taxes.”
The Benefits of Cost SegregationEngineering based cost
segregation studies allow commercial real estate owners to take
assets that are considered to be real property assets and
reclassify them as personal property assets.
Real property assets are depreciable over a 39 year period,
where personal property assets aredepreciable over 5 and 7
years.
This reclassification accelerates your depreci-ation period,
which decreases current and past tax obligations, thus increases
your cash flow.
What this could mean for youThe IRS allows you to make a simple
change to your method of depreciation to account for a cost
segregation study.
The government also allows taxpayers to catch up on all previous
years for items reclassified into shorter depreciation lives as a
result of a cost segregation study.
The engineered cost segregation study meansmore cash flow for
you and your business.
On a building purchased or built for $2,500,000 the owner can
dramatically reduce their current tax liability.
The Engineered Cost Segregation Study in-creased the
depreciation by over $615,000 through 7 years, resulting in a tax
reduction of over $215,000, leaving the property owner the
additional $215,000 to use as they desire.
The Journal of Accountancy States that:
“Each $100,000 in assets reclassified from a 39-year recovery
period to a 5 yearrecovery period results in approximately $22,000
in net present value savings,
assuming an 8% discount rate and a 40% marginal tax rate.”
John P. Power CPA - Power Financial Group, LLCph: 701.255.7259
fx: 701.255.2213
[email protected] www.powercpa.net
Contact:
Free Request for Estimate
Before CS After CSStraight
DepreciationAcceleratedDepreciation
Year 1 $64,000 $280,000Year 2 $64,000 $226,000Year 3 $64,000
$156,000Year 4 $64,000 $127,000Year 5 $64,000 $108,000Year 6
$64,000 $87,000Year 7 $64,000 $79,0007 Years
Total$448,000 $1,063,000
http://www.costsegregationhelp.com/docs/CSH_EstimateForm.pdf
