Commercial Investment Real Estate Winter 2020 | Page 19

Life With The Pin CCIM Institute provides its members with the most sophisticated knowledge, technology, and operational platform to power their business. CCIM Membership Benefits this law was passed, building improvements like plumbing, ventila- tion systems, and alarm systems were treated as 15-year assets. This was great news for renovators; they could now depreciate these as- sets over a shorter, 15-year period. When the Tax Cuts and Jobs Act was passed two years later, Congress’s intent was to extend bonus depreciation to qual- ified improvement property. Unfortunately, the appropriate word- ing did not make it into the tax bill, and qualified improvement A cost segregation study is a strate gic planning tool that can assess an entity’s real property assets and identify a portion of those costs that can be treated as personal property. Lifelong Learning Free and discounted courses covering development, data analysis, and more FindaCCIM.com and CCIM Connect An exclusive global network for business and industry intelligence Site To Do Business The industry’s best digital toolkit for market analysis Affinity Provider Program property took a major hit. Not only did it never become eligible for bonus depreciation, it reverted to 39-year property. While we are still hoping for a technical correction, qualified improvement prop- erty is currently no better off than real property. While renovators may feel like they got the short end of the stick, they can still benefit from a cost segregation study. The purpose of their study should be to identify which assets are not qualified im- provement property so that they can depreciate those assets over a three-, five-, or seven-year period and qualify for bonus depreciation. All taxpayers in the commercial real estate industry — con- tractors, renovators, purchasers, and investors — may benefit from a cost segregation study to determine which property qualifies for accelerated depreciation. To help with the study, engage qualified professionals with expertise in this area like veteran engineers, quality CPA firms, and others holding the Certified Cost Segrega- tion Professional designation. These professionals will help deter- mine if the benefits will outweigh the costs. John Blake, CPA Partner with Klatzkin & Company LLP, specializing in taxation and business consulting in commercial real estate Contact him at [email protected]. Exclusive discounts on travel, proptech, printing, and more DealShare A database of listings not found anywhere else Commercial Investment Real Estate Magazine The award-winning publication and highly anticipated podcast that cover market trends and innovations Experience life with the pin. Visit www.ccim.com/benefits