CBRE is one of the nation's leading providers of cost segregation and consulting services to real estate owners. CBRE works together with CPA firms and their clients to reclassify commercial real estate assets which results in accelerated depreciation, lower taxes and increased cash flow. This specialized engineering practice has literally uncovered millions of dollars in additional tax benefits for constructed, acquired, expanded or remodeled commercial real estate.

1. CB Richard Ellis Cost Segregation Brett C. Ward Managing Partner First Cost Segregation In association with CB Richard Ellis Tax Benefits for Commercial Property Owners

3. Section 1: What is Cost Segregation?

7. Personal Property Redefined No longer “screwed and glued” IRS Cost Segregation Audit Techniques Guide “ Tangible personal property includes all property (other than structural components) which is contained in or attached to a building.”

8. Process Electrical

9. Process Plumbing

10. Decorative Lighting

11. Finish Carpentry

12. Landscaping and Site Work

14. Section 2: Benefits to Property Owners

18. Reclassification Averages Warehouses 8 - 12% Office Building 10 - 15% Retail 10 - 40% Medical Facilities 15 - 30% Grocery Stores 15 - 40% Hotels 20 - 40% Heavy Mfg 25 - 70% Processing Plants 60 - 90%

19. Difference in Depreciation Cost basis (structure) % reclassified into 5-year Reclassified assets 39 yr avg. annual write off 5 yr avg. annual write off $2,000,000 20% $400,000 $10,256 $80,000

20. Difference in Income Taxes 39-Year Schedule Annual income tax liability ($80,000) Annual depreciation expense + $10,256 Net annual income tax liability ($69,744) Total income taxes paid years 1-5: ($348,720)

21. Difference in Income Taxes 5-Year Schedule Annual income tax liability ($80,000) Annual depreciation expense -$80,000 Net annual income tax liability $ 0 Total income taxes paid years 1-5: $0

24. Section 3: Cost Segregation and CPAs

25. American Institute of Certified Public Accountants “ Cost segregation is a valuable tax strategy… The reason is simple: tax deductions are taken earlier, which translates into a present-value, cash flow benefit.” - “Good News for Clients” Sept. 2006

28. Section 4: About CB Richard Ellis

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