Cost segregation studies can accelerate tax depreciation deductions for business real estate by reclassifying assets from 39-year to shorter-lived 5, 7, and 15-year property. A cost segregation study systematically analyzes building costs and reclassifies components like electrical, plumbing and HVAC from 39-year to accelerated categories. Studies provide substantial tax benefits through additional depreciation deductions and tax deferral. The process requires specialized expertise in taxation, engineering and project management to properly analyze costs and document reclassifications.
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High Definition Impressions (HDI) develops grassroots educational marketing strategies that help healthcare providers and manufacturers expand market share, while promoting patient loyalty and best practices branding. Our well planned and research-based programs are co-created with medical experts for medical experts.
11 04 01 Workplace Forum Exec Summary JanIan McKenna
Adviser Forum is an environment where major adviser, EBCs and provider /investment firms can meet to discuss key business issues and identify how to address them co-operatively for the benefits of consumers and the industry
Workplace Forum addresses operational and business issues in the workplace benefits, group pensions, group risk and other employee benefits areas to improve the quality of services to employers and employees
Talk Given At ICSA National Conference in Atlanta 2010: The challenge of providing world-class levels of customer service through a service business located in multiple states, with diverse employees, in a variety of industries and markets.
High Definition Impressions (HDI) develops grassroots educational marketing strategies that help healthcare providers and manufacturers expand market share, while promoting patient loyalty and best practices branding. Our well planned and research-based programs are co-created with medical experts for medical experts.
@Agawish creating a stunning ui with oracle adf faces, using sassAmr Gawish
Oracle Application Development Framework (Oracle ADF) provides developers and end users with create functionality, but without a great user interface to show off these features, the client might be driven away from Oracle ADF applications. Come to this session to see a demonstration of how to easily create a stunning user interface with Oracle ADF skinning by using the power of Sass and Compass. You will learn how to create responsive and adaptive user interfaces.
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@Agawish creating a stunning ui with oracle adf faces, using sassAmr Gawish
Oracle Application Development Framework (Oracle ADF) provides developers and end users with create functionality, but without a great user interface to show off these features, the client might be driven away from Oracle ADF applications. Come to this session to see a demonstration of how to easily create a stunning user interface with Oracle ADF skinning by using the power of Sass and Compass. You will learn how to create responsive and adaptive user interfaces.
A review of the incentive reward card market in 1995, with the Exclusively Yours MasterCard stored-value card as the industry leader. The whole card use in rewards was brand new. Fun cover picture of the SITE award dinner and Hillary Armstrong wearing a dress made out of the cards.
Financial Analysis - China Communications Construction Company Ltd. is a tran...BCV
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2010 Spring Investment Solar System Feasibility CourseTed Horton
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This paper deals with testing theory regarding Home and Foundation Test for Ark Compositions from their initial mechanical theory through the eventual remote building theory of glass community evolution.
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). In Part II we prepare metrics for the simulation model from our testing, and we also prepare cases for mitigation of conditions to prevent the project from encountering backsliding results during the crossover period of the project. Also, conditions likely to occur in every phase are studied. In Part III: we prepare cases for Mitigation and Outcomes, to be defined in task order in our next paper.
Let's dive deeper into the world of ODC! Ricardo Alves (OutSystems) will join us to tell all about the new Data Fabric. After that, Sezen de Bruijn (OutSystems) will get into the details on how to best design a sturdy architecture within ODC.
Search and Society: Reimagining Information Access for Radical FuturesBhaskar Mitra
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Neuro-symbolic is not enough, we need neuro-*semantic*Frank van Harmelen
Neuro-symbolic (NeSy) AI is on the rise. However, simply machine learning on just any symbolic structure is not sufficient to really harvest the gains of NeSy. These will only be gained when the symbolic structures have an actual semantics. I give an operational definition of semantics as “predictable inference”.
All of this illustrated with link prediction over knowledge graphs, but the argument is general.
State of ICS and IoT Cyber Threat Landscape Report 2024 previewPrayukth K V
The IoT and OT threat landscape report has been prepared by the Threat Research Team at Sectrio using data from Sectrio, cyber threat intelligence farming facilities spread across over 85 cities around the world. In addition, Sectrio also runs AI-based advanced threat and payload engagement facilities that serve as sinks to attract and engage sophisticated threat actors, and newer malware including new variants and latent threats that are at an earlier stage of development.
The latest edition of the OT/ICS and IoT security Threat Landscape Report 2024 also covers:
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Sectoral targets and attacks as well as the cost of ransom
Global APT activity, AI usage, actor and tactic profiles, and implications
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Major cyber events in 2024
Malware and malicious payload trends
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https://sectrio.com/resources/ot-threat-landscape-reports/sectrio-releases-ot-ics-and-iot-security-threat-landscape-report-2024/
Key Trends Shaping the Future of Infrastructure.pdfCheryl Hung
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Cheryl Hung, ochery.com
Sr Director, Infrastructure Ecosystem, Arm.
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👩🏫 Lenka Dulovicova, Product Program Manager, UiPath
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https://arxiv.org/abs/2306.08302
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https://www.microsoft.com/en-us/research/blog/graphrag-unlocking-llm-discovery-on-narrative-private-data/
1. Cost Segregation Services
Asset Reclassification for Accelerated Depreciation of
Business Real Estate Property
Presented by:
Michael F. Cannon, MA, MBA, AVA
President,
MCOM Corporation
2. Objectives
• Present you with an overview of the significant
tax benefits Cost Segregation Studies provide
• Describe the new tax law guidance that permits
use of these studies
• Show you how these studies can benefit your
clients
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MCOM Corporation
3. Overview of the Tax Opportunity
• Cost Segregation Studies (CSS) and their Benefits
– A CSS is an IRS accepted asset-reclassification process that
accelerates tax-depreciation deductions
– Real estate is reclassified from 39 yr. or 27.5 yr. depreciable
property to shorter-lived (5, 7 and 15 yr.) property for
depreciation purposes
– Recaptures available depreciation from prior years, producing
substantial benefits
• IRS Tax Guidance 2004 (IRS Revenue Procedure 2004-11)
now allows “Presumptive Approval” of this asset
reclassification technique
• This procedure is safe and sure. If done following
IRS Guidelines and Procedures no restatement of
prior tax returns is required
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MCOM Corporation
5. The Cost Segregation Core Concept
The Basis for Component Depreciation
• 1250 and 1245 Property Definitions
– 1250 Property
• Building land and systems, in place to allow and support the
functions of the structure as a building
• Allows depreciation at 39.5 and 27.5 years
– 1245 Property
• Building components, land and systems in place to allow
and support the functions of the structure as a business
• Allows accelerated depreciation at 15, 7 and 5 year terms
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MCOM Corporation
6. The Major Client Benefits
• Allocation of direct costs to shorter asset lives
• Accelerated write down of soft/indirect costs
• Lowers tax liability and increases cash flow
• Recaptures reclassified depreciation back to 1987
in one year “catch-up”
• Faster write down of new construction,
renovations and/or expansions
• No need to amend previously filed tax returns; for
entity or for shareholders
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MCOM Corporation
7. Typical Non Accelerated Case
Total Depreciable
Building Costs
Depreciation Schedule
5 Year Property 7 Year Property 15 Year Property 39 Year Property
0 0 0 100%
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MCOM Corporation
8. Some Acceleration Done By CPA
Firm or Internal Finance Team
Total Depreciable
Building Costs
Depreciation Schedule
5 Year Property 7 Year Property 15 Year Property 39 Year Property
0 2-4% 0 96-98%
FF&E
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MCOM Corporation
9. Systematic Cost Segregation Study
Process
Professional
CSS Team
Soft Costs Other Indirect Costs Hard Costs Loan Amortization Expensable Items
Total Building Costs
Depreciation
Schedule
5 Year 7 Year 15 Year 39 Year
Expensable Items
8-12% 4-8% 10-15% 65-80%
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MCOM Corporation
10. Systematic Cost Segregation Study Process
Professional
CSS Team
Soft Costs Other Indirect Costs Hard Costs Loan Amortization Expensable Items
Total Building Costs
Depreciation
Schedule
5 Year 7 Year 15 Year 39 Year
Expensable Items
8-12% 4-8% 10-15% 65-80%
Personal Property Personal Property Site Work Structural Property
Electrical FF&E Site Preparation Foundations
Plumbing Security Sys Concrete Walls, Roof
HVAC Accessories Landscaping Interior Systems
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11. Systematic Cost Segregation Study Process
Older Buildings
Professional
CSS Team
Soft Costs Other Indirect Costs Hard Costs Loan Amortization Expensable Items
Total Building Costs
Depreciation
Schedule
Depreciation
Catch Up Prior Yrs
5 Year 7 Year 15 Year 39 Year
Expensable Items
8-12% 4-8% 10-15% 65-80%
Personal Property Personal Property Site Work Structural Property
Electrical FF&E Site Preparation Foundations
Plumbing Security Sys Concrete Walls, Roof
HVAC Accessories Drainage Interior Systems
11
12. Companies That Benefit the Most
• Processing Plants (60-90%)
• Heavy Manufacturing (25-70%)
• Hotels (20-50%)
• Office Building (15-40%)
• Retail (15-40%)
• Restaurants (15-40%)
• Grocery (15-40%)
• Light Manufacturing (15-40%)
• Nursing Homes (15-30%)
• Warehouses (8-12%)
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MCOM Corporation
13. How Can You Tell If
A Client Has Taken Full Advantage of
This CSS Benefit?
• A look at their depreciation schedules will show;
– Total amounts in 5, 7, 15 and 39 year
– Types of items accelerated
– Existence of report detailing case law support
– Systematic approach mandated by IRS
• Provide depreciation schedule to reputable Cost
Segregation firm for cost/benefit analysis
• Client can determine if the cost/benefit is worth it
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MCOM Corporation
14. Example of Estimated Depreciation
Acceleration
Original Cost Segregation*
Depreciation Estimated
Schedule Improvement
Depreciation Total $70,000,000 $70,000,000
39 year $68,000,000
15 year $0 $6,000,000
7 year $2,000,000 $0
5 year $0 $9,000,000
Estimated Addl Dep. $0 $8,000,000
Estimated Tax Defer. $0 $2,800,000
*Based on; building type, basis, years in service and item classification
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MCOM Corporation
15. Some Business Situations Will Not
Benefit
• Alternative Minimum Tax may reduce
immediate benefits to carry forward
• Pass thru of benefits has value only to
shareholders who can use the deduction
• Prompt disposition of property may cause
recapture of depreciation if gain is attributed
to the accelerated asset, this is generally
NOT the case.
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MCOM Corporation
16. Brief History of How We Got Here
• 1962-1997 depreciation taxation rules varied widely between;
– Investment Tax Credit case law, ACRS in 1981, Tax Reform Act of 1986
and the Revenue Reform Act of 1989
• 1997 HCA landmark tax court case
– became basis for reclassification of assets as per ITC case law
– Numerous real estate owners petitioned the tax courts stating that they were
required to construct “special use” rooms with special HVAC, electric, etc.
systems to run their medical systems and specialty testing instrumentation.
• 1999 IRS accepts HCA ruling but vows to “scrutinize” each case
• 2004 IRS agrees;
– changes in depreciation are “a change in method of accounting”,
– allows “presumptive acceptance” of accounting changes, and
– eliminates need to amend previous returns
• 2005 IRS Guidance (Dec 2004) sets standards on report content,
qualifications of preparers, engineering standards, knowledge
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MCOM Corporation
17. Major Areas of Cost Allocation
• 1245 Property
– Finish Carpentry
– Security and Communications Systems
– Electrical
– Plumbing
– Site Work
– HVAC
– Specialties and Accessories
• Indirect or Soft Costs
• Owner Incurred Costs Paid Outside of General Contract
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MCOM Corporation
19. 1245 Property
Security & Communication Systems
Interior Electrical for Machinery
and Equipment
Interior Electrical for Machinery and
Equipment
Security Lighting
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MCOM Corporation
23. 1245 Property
HVAC
Process Air Conditioning
Specialty Equipment
Other
Specialties &
Accessories
Duct Work for Kitchen A/C for Computer Process
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MCOM Corporation
24. Cost Segregation Process Is Detailed
and Exacting: Requires Specialized
Expertise
• Taxation Planning and Procedures Specifically
for Cost Segregation Studies
• In Depth Engineering Expertise
• Detailed Project Management Expertise
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MCOM Corporation
25. Taxation Expertise
• New Depreciation Rules and Regulations
• Specialized Tax Case Law verdicts from;
– 1970’s Investment Tax Credit case law
– Tax Reform Act of 1986 and Revenue Reform Act of 1989
– HCA Case 1997
– IRS HCA tax court ruling 1999
– 2004 IRS new rulings and guidance
• Body of case law, recent verdicts and pending
cases
Tax Law Expertise Engineering Team Project Management
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MCOM Corporation
26. Engineering Expertise
• Cost segregation engineers, licensed and experienced
in the field, with deep knowledge in
– Site, costing, materials, estimating expertise
– RS Means, Marshall & Swift data mining
• Wide experience in all cost segregation aspects
– Latest knowledge in real estate tax innovation and CSS
study development
– Site visit documentation process for all reclassification
activities
– Manage all aspects of component analysis, verification and
take offs as well as building cost reconstruction where data
is not available
Tax Law Expertise Engineering Team Project Management 26
MCOM Corporation
27. Project Management Expertise
• Project managers must be experienced in
– Direction of program components and scheduling
of multi-team efforts
– Control systems to deliver projects on time and
within approved budget
– Coordination of key data with client/CPA firms
– Key supplier relationships for essential
information gathering; GC, Subcontractors,
suppliers, plans, AIA, Change Orders, Invoices
Tax Law Expertise Engineering Team Project Management
27
MCOM Corporation
28. How We Would Work With Your
Clients
• Adapt to whatever form you feel is best for your client
– Independent supplier of the service
– Associated company to your services
– As a part of your internal client service
• Our process would follow you and your client preferences
• An “average” process would be as follows;
– Initial presentation of service to client
– Client provides depreciation schedule for review
– We present potential benefit and study costs to client for review
– Client gives us additional information on building property to begin study
– Client signs engagement letter
– We begin the project
28
* Client Responsibility
29. Essential Steps In the Work Process
• Acquire and organize all construction information
• Assure that “all in” numbers tie to depreciation schedule totals*
• Assign work teams and establish timetables
– engineering and construction experts to hard cost analysis
– financial team to all indirect and soft cost analysis
• Conduct site visits and obtain photographic documentation
• Allocate the building costs to their appropriate depreciable tax lives
• Write and assemble report components;
– project methodology and background narratives
– engineering breakdown and cost estimates
– summary of the new real and personal property by the appropriate tax lives
– documentation (IRS Code, Treasury Regulations, court cases and revenue rulings) as it applies to use of the real estate
and your specific industry
• Report serves as stand alone substantiation to support conclusions
• Present completed report and IRS Form 3115 to your team
• Team usually made up of 6 to 8 experts
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* Client Responsibility
30. Materials Available For Your Review
• Examples of Completed Studies
• Information Guide To Initiate Work
• Depreciation Acceleration Estimates from
Existing Depreciation Schedules
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MCOM Corporation