UNLOCKING HIDDEN VALUE WITH COST SEGREGATION
Understand the latest changes and how they affect your bottom line .
For example , let ’ s say you buy a commercial property for $ 1 million . A typical depreciation schedule would spread this over 39 years . However , with cost segregation , you might find that $ 300,000 of that investment could be depreciated over five to 15 years . The result ? A considerably lower tax bill in the initial years , freeing up cash for other investments or business needs .
Optimizing Cash Flow and Minimizing Tax Liability
Your real estate investment is a key to unlocking significant financial advantages . Cost segregation is an opportunity for anyone who has constructed , bought , expanded , or remodeled property to enhance cash flow and minimize tax liabilities . Tell you more ? It would be our pleasure .
What is Cost Segregation ?
Imagine buying a property and discovering hidden treasures within its walls . That ’ s what cost segregation does . It ’ s a meticulous process where we dissect your real estate investment , identifying elements eligible for accelerated depreciation . This method doesn ’ t just uniformly spread depreciation over 27 and a half or 39 years . Instead , it uncovers components of your property that can be depreciated over shorter periods like five , seven , or 15 years , creating immediate tax savings .
How Does a Cost Segregation Study Benefit You ?
Consider this : when you buy a property , you ’ re not just investing in the building ’ s shell but its interiors , exteriors , and even landscaping . A comprehensive cost segregation study by our team can reveal that 20 to 40 percent of these components qualify for faster depreciation . This not only reduces your tax burden significantly but also enhances your cash flow .
Sam Pendolino
Senior Associate 230 North Market Street Wooster , OH 44691 sam . pendolino @ reacpa . com ( 678 ) 908 – 8098
Daniel Scott
Manager 905 Zane Street , 2nd Floor Zanesville , OH 43701 daniel . scott @ reacpa . com ( 220 ) 201-2009
The key to optimizing cash flow lies in reducing tax liability while maintaining compliance . Cost segregation is a tool that , when used correctly , does exactly that . Our team of experts , including engineers and tax professionals , will conduct a detailed analysis of your property , ensuring every eligible part is found and depreciated appropriately . This detailed scrutiny not only maximizes your tax benefits in the short term but also strategically positions your investment for long-term gains .
Understanding the Shift in Bonus Depreciation Rules
In the past five years , taxpayers have capitalized on the opportunity to utilize Bonus Depreciation , expensing 100 percent of most equipment and short-lived capital assets . However , the landscape is changing . Starting in 2023 , Bonus Depreciation will begin to phase out , decreasing to 80 percent and then dropping by 20 percent each year until 2026 . While the future of these rules remains uncertain with Congress , our team of tax experts and cost segregation professionals at Rea are equipped with alternative strategies to quickly expense capital purchases for tax mitigation . We encourage you to reach out to your tax advisor to explore what these options might entail , ensuring you continue to maximize your tax benefits in this evolving legislative environment .
Is Cost Segregation Right for You ?
Some might wonder if the cost of a cost segregation study is worth the potential savings . Our experience shows that for most property owners , the tax savings significantly outweigh the first investment in the study . Moreover , understanding the nuances of tax laws , like the Tax Cuts and Jobs Act of 2017 , is crucial . For instance , the Act ’ s 100 Percent Bonus Depreciation provision is a notable change for properties acquired and placed in service before specific dates .
Take the Next Step
At Rea , we don ’ t just conduct studies ; we build partnerships . Our goal is to ensure that every real estate investment you make is working as hard as it can for you . By partnering with us , you ’ re saving on taxes and you ’ re investing in a future of greater financial flexibility and success . Let ’ s talk and start unlocking the hidden value in your real estate investments .