Use Cost Seg Associates (CSA) to reduce taxes and generate significant cash flow.
Cash flow from tax savings can be 5%-10% of building costs within the first five years of ownership (e.g., $50K - $150K in cash flow for each $1M in building cost).
What buildings qualify?
Cost Segregation Studies can be performed for real estate holdings placed in service as far back as 1987. Studies can be performed on recently purchased facilities, newly constructed facilities and even major tenant renovations and leasehold improvements.
How does Cost Segregation work?
Commercial property owners can now segregate building costs into asset categories with shorter lives and apply accelerated methods for computing depreciation.
In many cases, 15% - 40% of the building costs can be depreciated in the first 5 to 15 years versus 27.5 or 39 years.
Why now?
The major IRS hurdles have been removed:
1) The IRS has published the “Cost Segregation Audit Technique Guide” for its agents.
2) The life-to-date deduction is allowed THIS YEAR compared to a four year allocation required previously.
Filing amended returns for prior years is NOT necessary.
3) The IRS now automatically approves your “Application for Change in Accounting Methods” (Form 3115) filed by a CPA.
Why have an “engineered” Study?
In the 2004 Cost Segregation Audit Technique Guide, the IRS specifies that cost segregation studies must be completed by “qualified personnel competent in design, construction, auditing, and estimating procedures relating to building construction.” “Cost segregation studies require a skill and understanding of the case law that is vested only in specialists. The studies require a significant expenditure of time in preparation…Only those taxpayers with access to the professionals who can prepare a valid Study may claim this tax benefit.”
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Why choose Cost Seg Associates?
This is all we do. Our construction and tax specialists have many years of experience and extensive knowledge in this very specialized area. At CSA we manage the cost segregation process for you. We have different resources available to fit your specific needs. We stay current on all IRS court cases and “private letter rulings” that relate to cost segregation.
Our commitment is to maximize the value to your client and minimize the risk.
What is the relationship between Cost Seg Associates and your firm?
CSA offers different partnering opportunities. They range from simple education and assistance to the development of an in-house cost segregation program.
Our goal is to provide you with an additional service offering to your customers.
Will we know the estimated tax savings and cost before deciding to move forward with a Study?
Yes, once CSA has received the required information on your client’s building(s), we will provide absolutely free of charge, an estimate of the potential tax deferral savings. At that time we will also tell you and your client what the cost of the Study will be.
What does the AICPA say?
The August 2004 issue of the “Journal of Accountancy” published by the AICPA included cost segregation studies in the section entitled “Tax Strategies CPA's Can Use to Help Clients Save Money.” The article states that “cost segregation is becoming an increasingly popular tax-planning technique” and that “owners of commercial real estate should obtain an engineering report that segregates assets into proper categories.”
How do we get started?
Contact: Dennis Brandanger 952.831.6300 Ext. 12
Email: dbrandanger@costsegprofessionals.com
www.costsegprofessionals.com
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