money matters
COST SEGREGATION
FOR DENTAL OFFICES
The Time is Now!
C
by Jeffrey M. Hobbs
ost segregation is quite simply the identification of
assets that meet IRS guidelines for accelerated depre-
ciation in your dental office. Most dentists’ offices have
at least 35% of the interior build-out that qualifies for five-year
depreciation. Take a look at your depreciation schedule – what
does it show… 39.5 years? 31 years? 27.5 years? 15 years?
Why let the IRS hold on to your money when it’s yours? The IRS
doesn’t pay you interest on over-paid income taxes, but they
sure charge you interest if you under-pay, don’t they?
What we do is simple, though the process of cost segregation is
highly technical requiring architectural and engineering train-
ing. In fact, the IRS Chief Counsel actually said, “…cost segre-
gation, for it to be properly applied, had to involve those with
competencies in architecture, engineering or construction
and/or construction techniques, in order for personal property
assets to be accurately identified and segregated.” Is your CPA
also an architect or engineer?
So, how does cost segregation actually affect me and my dental
office? Good question. Did you pull your depreciation schedule
to see how your assets are currently being depreciated? Please
do! However, let’s be conservative and say that 30% of the cost
of your build-out is all that qualifies for five-year depreciation,
and furthermore that you spent $150,000 to complete your
office. Well, 30% of $150,000 is $45,000 in depreciation. If you
are in the maximum tax bracket, that means you have about
$16,000 in over-paid federal income taxes if you have been in
your building or leasehold space for five years. You are due a
$16,000 income tax refund!
It doesn’t matter if you have been there longer or for a shorter
period of time, what matters is that you are due a refund, or tax
credit if you choose. Either way, the IRS is holding your money
when it should be in your pocket! Time-value of money – think
about it – a dollar is always worth more today than tomorrow!
Knowledge is power when you apply it. Get with your local
forensic cost segregation engineering firm today! It’s your
money, why wait?
Mr. Hobbs may be reached at [email protected]
or at (972) 897-8019.
Jeffrey M. Hobbs
President and CEO
Segregation Holding, LLC
Mr. Hobbs has more than 38 years
of management and financial con-
sulting experience with a special
focus on forensically engineered
cost segregation studies for com-
mercial property owners. His unique
background as a forensic architect
from the University of Tennessee
coupled with a lifetime of business
ownership gives him a competitive
advantage in applying the benefits of cost segregation to virtually any
commercial enterprise.
Mr. Hobbs is one of the pioneers of independent cost segregation
providers, an early member of The American Society of Cost Segrega-
tion Professionals, The American Society of Tax Professionals, numer-
ous national and regional associations, as well as a frequent and
sought-after speaker on the subject of cost segregation. Mr. Hobbs
leads seminars and continuing education classes on cost segregation
for the accounting and commercial real estate industries.
Mr. Hobbs has significant hands on experience with every aspect of
cost segregation for a variety of commercial properties and circum-
stances, dealing with properties from under $100,000 to $2,300,000,000
across America as well as globally.
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