Kim Lochridge
Overview
Service Locations: United States.
What is Cost Segregation?
A cost segregation study is a federal income tax tool that increases your near-term cash flow by deferring taxes.
With a cost segregation analysis, you could be able to write off up to 30-35% of your building’s original purchase price in the first year!
Because depreciation occurs when a purchased building ages, it loses value over time. Actually, your building is not only one piece of property, but comprised of subcomponents (such as lighting fixtures, heating and air conditioning systems, and other components that deteriorate over time).
But unlike the whole of a building, which is seen as having either 27.5- or 39-year lifespan, subcomponents are granted a five- or 15-year lifespan, making the depreciation deduction larger, especially in the first several years. Consequently, whether your property is residential or commercial, you can write off that cost either in a 27.5- or 39-year timeframe.
Features
How Much Money Could You Save?
Since many components can be written off after a cost segregation study, if your purchase price was $1 million (for instance), you can deduct $300-400,000 immediately. Consequently, if you only invested $100,000 of your own money and borrowed the other $900,000, you’ve only spent $100,000, but received a $300,000 deduction!
For example, let’s assume you’re classified as a real estate professional or you have material participation in a commercial real estate investment, with a $100,000 salary. Because you can apply your $300,000 deduction to offset taxable income, you’re only paying taxes on $700,000!
With our expertise, we can uncover potential tax savings and increase your cash flow by reclassifying and depreciating your property. As a result, you can accelerate the return on capital from your property investment.
As part of our reporting process, Engineered Tax Services provides a detailed engineering report and works seamlessly with the IRS and your CPA firm for minimal disruption to your business.
Most importantly, at Engineered Tax Services, we’re national experts in the field of cost segregation and its tax benefits. As a matter of fact, we’ve completed over 30,000 cost seg studies in the past 20 years and saved our clients millions of dollars in taxes.
In short, it helps to work with a savvy accounting firm.
Contact Kim Lochridge - Cost Segregation Provider
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