A cost segregation study will identify items that can be properly classified as tangible personal property or land improvements, rather than real property that is depreciated over 39 years.
This document provides an overview of cost segregation, which is an engineering study that identifies components of commercial property that qualify for accelerated depreciation. Key points include:
- Cost segregation was established in the 1986 Tax Reform Act and a landmark 1997 court case. It allows for reclassifying assets for faster depreciation.
- Benefits include immediate tax savings, increased cash flow, and recovering missed depreciation. Properties built or renovated since 1987 may qualify.
- The process involves an engineering study to determine eligible components, followed by tax filing to claim the benefits.
AmCorp Management is an expense analysis firm that specializes in cost segregation studies to help clients accelerate depreciation deductions and reduce taxes. Through cost segregation, AmCorp identifies personal property assets like lighting, flooring and HVAC that are normally grouped with real estate. Reclassifying these assets to shorter recovery periods like 5 and 7 years increases annual tax deductions and cash flow. AmCorp has helped over 20,000 clients recover almost $2 billion in savings through this process. A typical cost segregation study can reclassify an average of 32% of property value to faster depreciation schedules, yielding substantial tax benefits.
AmCorp Management is a cost segregation firm that identifies real estate components that can be reclassified as personal property for tax purposes, accelerating depreciation deductions. They have engineers and tax professionals who conduct cost segregation studies according to IRS guidelines. These studies typically reclassify 25-35% of real property costs, allowing faster depreciation and increased cash flow. AmCorp provides no-cost feasibility studies and ensures clients face no audit risk from proper cost segregation.
AmCorp Management, Inc. is a cost segregation firm that identifies real estate components that can be reclassified as personal property for tax purposes, accelerating depreciation deductions. They have engineers, tax professionals, and construction experts who conduct feasibility studies and cost segregation analyses to maximize clients' tax benefits. A typical analysis reclassifies 25-35% of a property, like portions of buildings, from real to personal property with 5, 7, or 15-year recovery periods instead of 27.5 or 39 years. This provides immediate tax savings through increased first-year deductions and lowers taxes owed over several years. AmCorp's process involves a free feasibility study followed by a full cost segregation analysis if benefits outwe
Cost segregation is a tax strategy that identifies property components of commercial buildings that qualify for accelerated depreciation timelines under 5, 7, 15, or 20 years rather than the standard 39 years. An engineering-based cost segregation study provides the most accurate cost allocation analysis and tax benefits, potentially increasing cash flow and reducing taxes by tens or hundreds of thousands of dollars depending on the property value. Property owners of all commercial property types from $750,000 upwards can benefit from a cost segregation study any time after a property is placed in service, and can claim tax deductions on previous years' undervalued depreciation dating back to 1987.
A cost segregation study will identify items that can be properly classified as tangible personal property or land improvements, rather than real property that is depreciated over 39 years.
This document provides an overview of cost segregation, which is an engineering study that identifies components of commercial property that qualify for accelerated depreciation. Key points include:
- Cost segregation was established in the 1986 Tax Reform Act and a landmark 1997 court case. It allows for reclassifying assets for faster depreciation.
- Benefits include immediate tax savings, increased cash flow, and recovering missed depreciation. Properties built or renovated since 1987 may qualify.
- The process involves an engineering study to determine eligible components, followed by tax filing to claim the benefits.
AmCorp Management is an expense analysis firm that specializes in cost segregation studies to help clients accelerate depreciation deductions and reduce taxes. Through cost segregation, AmCorp identifies personal property assets like lighting, flooring and HVAC that are normally grouped with real estate. Reclassifying these assets to shorter recovery periods like 5 and 7 years increases annual tax deductions and cash flow. AmCorp has helped over 20,000 clients recover almost $2 billion in savings through this process. A typical cost segregation study can reclassify an average of 32% of property value to faster depreciation schedules, yielding substantial tax benefits.
AmCorp Management is a cost segregation firm that identifies real estate components that can be reclassified as personal property for tax purposes, accelerating depreciation deductions. They have engineers and tax professionals who conduct cost segregation studies according to IRS guidelines. These studies typically reclassify 25-35% of real property costs, allowing faster depreciation and increased cash flow. AmCorp provides no-cost feasibility studies and ensures clients face no audit risk from proper cost segregation.
AmCorp Management, Inc. is a cost segregation firm that identifies real estate components that can be reclassified as personal property for tax purposes, accelerating depreciation deductions. They have engineers, tax professionals, and construction experts who conduct feasibility studies and cost segregation analyses to maximize clients' tax benefits. A typical analysis reclassifies 25-35% of a property, like portions of buildings, from real to personal property with 5, 7, or 15-year recovery periods instead of 27.5 or 39 years. This provides immediate tax savings through increased first-year deductions and lowers taxes owed over several years. AmCorp's process involves a free feasibility study followed by a full cost segregation analysis if benefits outwe
Cost segregation is a tax strategy that identifies property components of commercial buildings that qualify for accelerated depreciation timelines under 5, 7, 15, or 20 years rather than the standard 39 years. An engineering-based cost segregation study provides the most accurate cost allocation analysis and tax benefits, potentially increasing cash flow and reducing taxes by tens or hundreds of thousands of dollars depending on the property value. Property owners of all commercial property types from $750,000 upwards can benefit from a cost segregation study any time after a property is placed in service, and can claim tax deductions on previous years' undervalued depreciation dating back to 1987.
This document provides an overview of cost segregation, which is a tax strategy for commercial property owners to shorten depreciation periods for certain building components. It discusses the history and legal basis of cost segregation, how it results in increased tax savings and cash flow compared to traditional depreciation over 39 years. The document also outlines the cost segregation process, common asset classes and lives, benefits like catch-up depreciation, and answers frequently asked questions.
This document provides a summary of an engineering tax services presentation. It discusses various tax strategies and incentives including cost segregation studies, energy tax credits under 179D and 45L, and the new IRS tangible property regulations. Cost segregation allows for accelerated depreciation by reclassifying portions of real property as personal property. Energy tax incentives provide deductions or credits for energy efficient commercial buildings. The presentation also reviews potential impacts of proposed Trump tax reforms and provides case studies on clients who benefited from these engineered tax strategies.
Cost-segregation studies allow taxpayers to write off a much greater percentage of their buildings (and tenant improvements) over a shorter time period. More specifically, it's an engineering-based approach that allows building owners to reallocate Code Sec. 1250 (real property) to Code Sec. 1245 (personal property), which increases depreciation deductions, thereby reducing the owner's tax burden.
2014 wla conference big tax ideas that save real moneyDebby Keegan
This presentation highlights the top 5 tax things you need to know for 2014 if you're in the lodging industry. This high level discussion means you can leave your slide rule and pocket protectors at home! We will focus on how you can put real money back into your pockets.
The document discusses cost segregation, which is a strategic tax approach that allows commercial property owners to maximize their cash flow and tax deductions by accurately depreciating qualifying land improvements and personal property components over shorter time periods than the overall building structure. A cost segregation study identifies these components, their costs, and assigns the appropriate recovery periods under IRS guidelines to create an optimized depreciation schedule for tax purposes.
This document summarizes key points from a presentation on tax strategies related to cost segregation, energy tax incentives, and the new tangible property regulations. Some of the main topics covered include:
- Cost segregation analysis which can reclassify portions of buildings from long-term to shorter-term property classes, providing accelerated depreciation.
- Energy tax incentives including the 179D deduction for energy efficient commercial buildings and the 45L deduction for energy efficient homes. Case studies show potential tax benefits.
- Changes to the tangible property regulations regarding the capitalization of repairs, maintenance, improvements, and asset dispositions. New elections are provided regarding routine maintenance and capitalizing repair costs.
- Updates to de minim
ETS Specialty Tax Update & Final Repair OverviewRyan Slack
This document summarizes a presentation on tax strategies related to cost segregation, energy tax incentives, and the new IRS tangible property regulations. It discusses how cost segregation studies can reclassify portions of buildings from nonresidential real property depreciated over 27.5 or 39 years to personal property depreciated over shorter periods, providing tax benefits. It also outlines federal energy tax incentives like the 179D deduction and how properties like manufacturing facilities, airports and malls benefit most from cost segregation. The presentation provides case studies on how these strategies generated substantial tax savings and refunds for various property types.
The document summarizes design considerations for renovating the historic Meier & Frank Delivery Depot building for a new tenant, Vestas. Key points discussed include:
- The design celebrates the contrast of the historic building fabric with a modern workplace environment.
- An atrium was proposed to address the challenge of no natural light penetration to the building core, providing light and improving collaboration between floors.
- Other challenges included the building being a full city block with no windows, and interior renovations requiring historic review.
- Additional topics covered include lighting approach, material efficiency, water efficiency, and improving the indoor environment. The general contractor discussed challenges around seismic upgrades, the historic status, and benefits of the
CBRE Cost Segregation- Tax Benefits for Commercial Property Ownersbcward
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.
This document discusses cost segregation and how it can provide tax savings benefits for building owners. Cost segregation involves analyzing building components and identifying those that are eligible for accelerated depreciation, providing significant tax deductions. An engineering-based cost segregation study can increase deductions by $50,000 to $80,000 per $1 million in building basis. The document provides examples of tax savings from cost segregation studies of various property types, including apartments, offices, warehouses, and self-storage facilities. It encourages building owners to have a no-cost analysis done of their property to realize potential tax savings benefits.
Hayley Capital provides cost segregation studies and other engineered tax strategies that allow clients to claim additional depreciation deductions and reduce their tax liability. They operate nationwide and work with commercial real estate owners, builders, law firms, and accounting firms. Cost segregation studies identify building components that can be reclassified to faster depreciation timeframes, providing immediate tax savings. Hayley Capital also offers research and development tax credit services and energy efficient building tax deductions. Their customized software and audit-proof reports provide significant tax benefits for clients.
The document provides information about Brian Wages, a tax credits and incentives specialist. It summarizes Brian's background, areas of expertise in tax credits, and contact information. It then provides summaries of cost segregation, R&D tax credits, and green energy incentives. Cost segregation allows identifying property costs that can be depreciated faster. R&D tax credits require qualified research activities. Green energy incentives include section 179D deductions and solar investment tax credits. The document aims to educate manufacturers on available tax savings opportunities.
New Trump Administration Updates: Federal, State and Local Energy & Specialt...Ryan Slack
This document summarizes a presentation by Michael F. D'Onofrio on various tax strategies including cost segregation, energy tax incentives, and changes to tangible property regulations. The presentation covers topics such as 179D energy tax deductions, cost segregation studies to accelerate depreciation, abandonment credits, and the new tangible property regulations. It provides examples of cost segregation results for a medical clinic and energy tax deductions for various property types such as offices and hotels. Learning objectives are also listed for topics like cost segregation, energy incentives, and the tangible property regulations.
This document discusses how conducting a cost segregation study can maximize tax benefits for property owners. It explains that a cost segregation study separates building costs into components that can be depreciated over different time periods, providing larger annual tax deductions over a shorter time frame. Conducting this study for a new $5 million building was shown to provide over $800,000 more in tax benefits compared to standard depreciation methods. The document also outlines other benefits like deducting replacement costs and discusses how various property types could benefit from a cost segregation study.
This document provides an overview of cost segregation, which is the process of identifying components of commercial real estate that qualify as shorter-lived assets for tax purposes. This allows businesses to accelerate depreciation deductions and reduce current tax obligations. The presenter discusses the tax code framework around cost segregation, relevant IRS guidance and court cases. Key benefits noted include increased cash flow through higher deductions, compliance with IRS standards, and creating an audit defense. The presentation provides guidance on when cost segregation makes sense, engaging qualified professionals to conduct the study, and the process involved.
Tim dettlaff presentation fmli nov 13 2014MikeWorsfold
The document discusses asset sustainability challenges faced by public infrastructure organizations. Common challenges include ongoing building deterioration, constrained capital budgets, growing deferred maintenance backlogs, and the need for carbon footprint reduction. It is estimated that the national public asset infrastructure has over $3 trillion in replacement value but over $350 billion in current unfunded deferred maintenance backlogs that could grow to $740 billion over 10 years without significant capital reinvestment. The document outlines frameworks for assessing asset needs, identifying sustainability strategies and solutions, and implementing optimization plans to address infrastructure challenges.
Bracken Hendricks | Innovation Showcase | 2014 Solar SymposiumGW Solar Institute
This is an Ignite Style presentation (five minute max presentations with slides that automatically advance every 15 seconds) that was a part of the 2014 Solar Symposium Innovation Showcase.
Bracken Hendricks, CEO, Urban Ingenuity
PACE and Affordable Housing: Find out how Property Assessed Clean Energy (PACE) financing can fund clean energy retrofits and help solve broader financial challenges for affordable housing developers, owners, and property managers by providing a new capital solution for affordable housing preservation.
The document summarizes the process and key considerations for an economist in choosing to purchase a solar panel system. It outlines 3 main steps: 1) picking a solar panel system by comparing options on factors like efficiency, warranty and price; 2) calculating the projected savings and return on investment; and 3) carefully selecting a qualified solar integration company by evaluating signals about their reputation, services and contract terms. The overall goal is to find a system with a short payback period and high return on investment to satisfy the economist's priorities of profitability over environmental benefits.
The document provides an overview of a presentation on property management. It discusses various topics including the pros and cons of being a landlord, types of properties and landlords, hiring a professional management team, leasing properties, managing rentals, tools for landlords, and taxation related to rental properties. The classroom rules and agenda are also outlined. The presentation aims to educate attendees on effectively managing rental properties and being landlords.
This document provides an overview of cost segregation, which is a tax strategy for commercial property owners to shorten depreciation periods for certain building components. It discusses the history and legal basis of cost segregation, how it results in increased tax savings and cash flow compared to traditional depreciation over 39 years. The document also outlines the cost segregation process, common asset classes and lives, benefits like catch-up depreciation, and answers frequently asked questions.
This document provides a summary of an engineering tax services presentation. It discusses various tax strategies and incentives including cost segregation studies, energy tax credits under 179D and 45L, and the new IRS tangible property regulations. Cost segregation allows for accelerated depreciation by reclassifying portions of real property as personal property. Energy tax incentives provide deductions or credits for energy efficient commercial buildings. The presentation also reviews potential impacts of proposed Trump tax reforms and provides case studies on clients who benefited from these engineered tax strategies.
Cost-segregation studies allow taxpayers to write off a much greater percentage of their buildings (and tenant improvements) over a shorter time period. More specifically, it's an engineering-based approach that allows building owners to reallocate Code Sec. 1250 (real property) to Code Sec. 1245 (personal property), which increases depreciation deductions, thereby reducing the owner's tax burden.
2014 wla conference big tax ideas that save real moneyDebby Keegan
This presentation highlights the top 5 tax things you need to know for 2014 if you're in the lodging industry. This high level discussion means you can leave your slide rule and pocket protectors at home! We will focus on how you can put real money back into your pockets.
The document discusses cost segregation, which is a strategic tax approach that allows commercial property owners to maximize their cash flow and tax deductions by accurately depreciating qualifying land improvements and personal property components over shorter time periods than the overall building structure. A cost segregation study identifies these components, their costs, and assigns the appropriate recovery periods under IRS guidelines to create an optimized depreciation schedule for tax purposes.
This document summarizes key points from a presentation on tax strategies related to cost segregation, energy tax incentives, and the new tangible property regulations. Some of the main topics covered include:
- Cost segregation analysis which can reclassify portions of buildings from long-term to shorter-term property classes, providing accelerated depreciation.
- Energy tax incentives including the 179D deduction for energy efficient commercial buildings and the 45L deduction for energy efficient homes. Case studies show potential tax benefits.
- Changes to the tangible property regulations regarding the capitalization of repairs, maintenance, improvements, and asset dispositions. New elections are provided regarding routine maintenance and capitalizing repair costs.
- Updates to de minim
ETS Specialty Tax Update & Final Repair OverviewRyan Slack
This document summarizes a presentation on tax strategies related to cost segregation, energy tax incentives, and the new IRS tangible property regulations. It discusses how cost segregation studies can reclassify portions of buildings from nonresidential real property depreciated over 27.5 or 39 years to personal property depreciated over shorter periods, providing tax benefits. It also outlines federal energy tax incentives like the 179D deduction and how properties like manufacturing facilities, airports and malls benefit most from cost segregation. The presentation provides case studies on how these strategies generated substantial tax savings and refunds for various property types.
The document summarizes design considerations for renovating the historic Meier & Frank Delivery Depot building for a new tenant, Vestas. Key points discussed include:
- The design celebrates the contrast of the historic building fabric with a modern workplace environment.
- An atrium was proposed to address the challenge of no natural light penetration to the building core, providing light and improving collaboration between floors.
- Other challenges included the building being a full city block with no windows, and interior renovations requiring historic review.
- Additional topics covered include lighting approach, material efficiency, water efficiency, and improving the indoor environment. The general contractor discussed challenges around seismic upgrades, the historic status, and benefits of the
CBRE Cost Segregation- Tax Benefits for Commercial Property Ownersbcward
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.
This document discusses cost segregation and how it can provide tax savings benefits for building owners. Cost segregation involves analyzing building components and identifying those that are eligible for accelerated depreciation, providing significant tax deductions. An engineering-based cost segregation study can increase deductions by $50,000 to $80,000 per $1 million in building basis. The document provides examples of tax savings from cost segregation studies of various property types, including apartments, offices, warehouses, and self-storage facilities. It encourages building owners to have a no-cost analysis done of their property to realize potential tax savings benefits.
Hayley Capital provides cost segregation studies and other engineered tax strategies that allow clients to claim additional depreciation deductions and reduce their tax liability. They operate nationwide and work with commercial real estate owners, builders, law firms, and accounting firms. Cost segregation studies identify building components that can be reclassified to faster depreciation timeframes, providing immediate tax savings. Hayley Capital also offers research and development tax credit services and energy efficient building tax deductions. Their customized software and audit-proof reports provide significant tax benefits for clients.
The document provides information about Brian Wages, a tax credits and incentives specialist. It summarizes Brian's background, areas of expertise in tax credits, and contact information. It then provides summaries of cost segregation, R&D tax credits, and green energy incentives. Cost segregation allows identifying property costs that can be depreciated faster. R&D tax credits require qualified research activities. Green energy incentives include section 179D deductions and solar investment tax credits. The document aims to educate manufacturers on available tax savings opportunities.
New Trump Administration Updates: Federal, State and Local Energy & Specialt...Ryan Slack
This document summarizes a presentation by Michael F. D'Onofrio on various tax strategies including cost segregation, energy tax incentives, and changes to tangible property regulations. The presentation covers topics such as 179D energy tax deductions, cost segregation studies to accelerate depreciation, abandonment credits, and the new tangible property regulations. It provides examples of cost segregation results for a medical clinic and energy tax deductions for various property types such as offices and hotels. Learning objectives are also listed for topics like cost segregation, energy incentives, and the tangible property regulations.
This document discusses how conducting a cost segregation study can maximize tax benefits for property owners. It explains that a cost segregation study separates building costs into components that can be depreciated over different time periods, providing larger annual tax deductions over a shorter time frame. Conducting this study for a new $5 million building was shown to provide over $800,000 more in tax benefits compared to standard depreciation methods. The document also outlines other benefits like deducting replacement costs and discusses how various property types could benefit from a cost segregation study.
This document provides an overview of cost segregation, which is the process of identifying components of commercial real estate that qualify as shorter-lived assets for tax purposes. This allows businesses to accelerate depreciation deductions and reduce current tax obligations. The presenter discusses the tax code framework around cost segregation, relevant IRS guidance and court cases. Key benefits noted include increased cash flow through higher deductions, compliance with IRS standards, and creating an audit defense. The presentation provides guidance on when cost segregation makes sense, engaging qualified professionals to conduct the study, and the process involved.
Tim dettlaff presentation fmli nov 13 2014MikeWorsfold
The document discusses asset sustainability challenges faced by public infrastructure organizations. Common challenges include ongoing building deterioration, constrained capital budgets, growing deferred maintenance backlogs, and the need for carbon footprint reduction. It is estimated that the national public asset infrastructure has over $3 trillion in replacement value but over $350 billion in current unfunded deferred maintenance backlogs that could grow to $740 billion over 10 years without significant capital reinvestment. The document outlines frameworks for assessing asset needs, identifying sustainability strategies and solutions, and implementing optimization plans to address infrastructure challenges.
Bracken Hendricks | Innovation Showcase | 2014 Solar SymposiumGW Solar Institute
This is an Ignite Style presentation (five minute max presentations with slides that automatically advance every 15 seconds) that was a part of the 2014 Solar Symposium Innovation Showcase.
Bracken Hendricks, CEO, Urban Ingenuity
PACE and Affordable Housing: Find out how Property Assessed Clean Energy (PACE) financing can fund clean energy retrofits and help solve broader financial challenges for affordable housing developers, owners, and property managers by providing a new capital solution for affordable housing preservation.
The document summarizes the process and key considerations for an economist in choosing to purchase a solar panel system. It outlines 3 main steps: 1) picking a solar panel system by comparing options on factors like efficiency, warranty and price; 2) calculating the projected savings and return on investment; and 3) carefully selecting a qualified solar integration company by evaluating signals about their reputation, services and contract terms. The overall goal is to find a system with a short payback period and high return on investment to satisfy the economist's priorities of profitability over environmental benefits.
The document provides an overview of a presentation on property management. It discusses various topics including the pros and cons of being a landlord, types of properties and landlords, hiring a professional management team, leasing properties, managing rentals, tools for landlords, and taxation related to rental properties. The classroom rules and agenda are also outlined. The presentation aims to educate attendees on effectively managing rental properties and being landlords.
3. AmCorp Management, Inc. is the Nation’s
most successful Tax Analysis Firm
What is Cost Segregation?
Cost Segregation is the process of identifying personal property assets
that are grouped with real property assets, and separating out personal
assets for tax reporting purposes. A cost segregation study identifies and
reclassifies personal property assets to shorten the depreciation time for
taxation purposes, which increases annual deductions, reduces current
income tax obligations, thus increasing income and cash flow.
P
Personal property assets i l d a b ildi ’ non-structural elements,
l t t include building’s t t l l t
exterior land improvements and indirect construction costs.
U.S. Treasury Department, 2004
“Cost Segregation is a lucrative Tax Strategy
that should be used in almost every major
purchase of Commercial Real Estate ”
Estate.”
4. AmCorp Management, Inc. is the Nation’s
most successful Tax Analysis Firm
Reality:
These large public corporations employ the best CFOs, Tax Accountants
and Bookkeepers, however every year they take their financial data to
Big4 Tax firms to have it reviewed by specialists in specific expense
areas.
areas It is a prudent thing to do however the problem for smaller
do,
companies is they cannot afford the 6 and 7 figure fees that go with it.
We provide mid-size and smaller firms with some of the same specialty
services without th h
i ith t the huge upfront f
f t fees. MMany of our examiners h
f i have
worked for and have been trained by the same Big4 firms.
Our Goal:
To provide smaller private property owners the
same facility expense management strategies
afforded to public companies by the Big4 tax firms
firms.
5. Our 1st Most Often Asked Questions
ISN’T MY ACCOUNTANT TAKING CARE OF THIS?
• A Cost Segregation Analysis includes an Engineering Study which requires
engineering expertise and experience in cost segregation fundamentals. Most
accounting firms do not have either.
IRS Cost Segregation guidelines requires a detailed engineering study and
analysis to fully qualify for all the available cost segregation tax advantages and
benefits. The Modified Accelerated Cost Recovery System (MACRS) is the current
method of accelerated asset d
th d f l t d t depreciation required b th U it d St t i
i ti i d by the United States income t
tax
code. Under MACRS, all assets are divided into classes which dictate the number
of years over which an asset's cost will be recovered.
Cost Segregation requires 3 knowledgeable parties
• A Qualified Engineer (MACRS)
• An Experienced Tax Accountant (MACRS and 3115)
• A Cost Segregation Specialist
6. Our 2nd Most Often Asked Questions
WILL THIS BE DISALLOWED BY THE IRS OR CAUSE AN AUDIT?
• No, the IRS has defined the process which guides Cost Segregation Studies
to take the proper deductions.
• N it would t k i
No, ld take improper d d ti
deductions t t i
to trigger an audit.
dit
None of our clients have ever had an audit due to one of our studies. The IRS has
D fi d th cost segregation process and endorsed it practice.
Defined the t ti d d d its ti
The IRS defined the process to include:
• 13 specific C t S
ifi Cost Segregation St d Elements
ti Study El t
• 9 specific Cost Segregation Report Elements
All which must be included in any IRS approved
engineering studies.
i i t di
7. The Cost Segregation Engineering Study
Tax Benefits of a Cost Segregation Engineering Study will:
1. Provide additional operating capital
2.
2 Minimizing federal tax obligations by accelerating depreciation deductions
3. It creates an audit trail, without it improper documentation of cost and
asset classifications can lead to an unfavorable tax adjustment.
4. Catch-Up Provision: Since 1996, taxpayers can capture immediate
retroactive savings on property added since 1987.
This presents additional cash flow p
p potential.
5. Additional tax benefits. Cost segregation can also
reveal new ways to reduce real estate and sales
and use taxes
taxes.
8. How It Works?
Engineering Survey and Study of an Office Building
(Identifying 5 & 7 Year Components)
Decorative Ceiling
Decorative Lighting
Decorative Non‐
Structural Wall
Coverings and Trim
Decorative Flooring
Items not mentioned:
Fire Protection Equipment,
Fire Protection Equipment,
Junction Boxes, Cabinets,
Signs, Equipment, Gas lines,
Electrical lines, Data Room
Equipment, Power Panels,
Conduit, Data Lines, HVAC
Conduit Data Lines HVAC
System, Cable Trays,
Improvements, etc…
9. Partial List of other Components that
can be Segregated and Re-Classified
• Communication • Emergency Fixtures
g y • Sinks Drains
• Systems Transformers • Waste Interceptors • Specific-Use Structures
• Hospitality Fixtures • Security Systems • Foundations
•TV Outlets & Wiring • Monitoring Systems • Mezzanines Stairs
• Distribution Panels • Conduit/Wiring • Platforms
• Distribution Wiring to Special Systems • Structural Steel
• High Voltage Switchgear • Flex Space • Task Lighting
• Data Jacks • Demountable Power Systems • Vents Beams Columns
• Miscellaneous Outlets • Shower/Deluge Fixtures • Gas Systems
• Emergency Power • Supply & Waste Systems • Vacuum Systems
•CComputer D t /P
t Data/Power • G /C
Gas/Compressed Ai
d Air •E h
Exhaust S t
t Systems
• Supply/Exhaust • Millwork Floor Coverings • Waste Interceptors
• Kitchens • Window Treatments • Audio/Visual Systems
• HVAC Systems • Wall Coverings • Buss Ducts
• Environmental Controls • Demountable Walls • Neutralization Basins
• Computer Environ. Control • Decorative Lighting • Humidity/Temp. Control
• Communications • Signage • Site Utilities
• Fire Protection Systems • Sidewalk & Curbing • Sewer
• Specialized Air Systems • Parking Lots & Curbing • Drainage Systems
• Filtration/Sensing • Landscaping Fencing • Outdoor Lighting
• Break/Coffee Stations • Swimming Pools • Much more…
10. Eligible Percentages by Property Type
Experience has shown that an average of 32% is typically eligible for Cost Segregation.
11. A Few Examples
Office Building - Purchased 2007 for $27,500,000 with 18 Units and 151,000 Square ft.
Asset Class Asset Life Original Allocation Allocation After C.S. Study
Personal Property 5 Year $0 0% $3,025,000 11%
Personal P
P l Property
t 7 Year
7Y $0 0% 0 0%
Land Improvements 15 Year $0 0% $3,300,000 12%
Real Property 39 Year $27,500,000 100% $21,175,000 77%
TOTAL ALL $27,500,000 100% $27,500,000 100%
Financial Gain From Accelerating Depreciation
Value of Property Accelerated $6,325,000
Percent of Property Accelerated 23%
Year 1 through 6 Tax Benefit
h h f $1,454,750
$
12. A Few Examples
Motel- Purchased 2005 for $10,925,000 with 32,000 Square ft.
Asset Class Asset Life Original Allocation Allocation After C.S. Study
Personal Property 5 Year $0 0% $2,294,250 21%
Personal P
P l Property
t 7 Year
7Y $0 0% 0 0%
Land Improvements 15 Year $109,250 1% $437,000 4%
Real Property 39 Year $10,815,750 99% $8,193,750 75%
TOTAL ALL $10,925,000 100% $10,925,000 100%
Financial Gain From Accelerating Depreciation
Value of Property Accelerated $2,731,250
Percent of Property Accelerated 25%
Year 1 through 6 Tax Benefit
h h f $682,912
$
13. The IRS has specific regulated requirements
for Cost Segregation Studies and Reports.
The IRS has 13 specific Cost
Segregation Study Elements
The IRS has 9 specific Cost
p
Segregation Report Elements
Many of today’s Cost
Segregation firms are not
g g
maintaining IRS guidelines for
their Cost Segregation Studies!
14. Who needs a Cost Segregation Study?
Anyone who:
1. Owns a building with over $1 000 000 i property value.
1 O b ildi ith $1,000,000 in t l
2. Has net income and is a profitable tax paying entity.
Qualifying Properties:
1 Purchased or Built their facility within the last 12 months
1. months.
2. Purchased or Built their facility since 1987.
3. Facility with Renovations or Additions.
4. Any Change of Ownership.
(Including Estates)
15. Tax Treatment
SIMPLE:
1. Catch-up d
1 C t h depreciation is taken in one year by filing IRS F
i ti i t k i b fili Form 3115
(Change of Accounting Method)
2. There a e NO a e ded tax returns to file.
e e are O amended a e u s o e
(File a new depreciation schedule)
3. Payments accompanying quarterly tax filings may be
immediately reduced
reduced.
16. Our Process
Provide you with a no-cost, no-obligation feasibility study
P id ith t bli ti f ibilit t d
This will:
• Identify your accelerated tax benefits
• Outline the Cost Segregation process
• Outline our fees
• Highlight your responsibilities
• Detail the timeline of the process
17. The Next Step
YOU
SUBMIT A LETTER OF UNDERSTANDING
PROVIDE COPIES OF THE FOLLOWING:
Purchase or build costs and data
Depreciation tax schedules
AmCorp Management
ANALYZE YOUR RECORDS
PROVIDE A FEASIBILITY STUDY
Upon approval of the Feasibility Study, we
will prepare a quality and IRS approved
Engineered Cost Segregation Study.