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Can a cost segregation study be applied to buildings not yet constructed?

Cost Segregation

Can a cost segregation study be applied to buildings or leasehold improvements not yet constructed? Yes! A cost segregation study can literally begin at the concept phase long before plans are drawn. The cost segregation study could be completed: Once the Certificate of Occupancy is issued and, the final tax-basis is ascertained from the final AIA 702s and 703s in collaboration with ...


1031 Exchange Year-end Tips

1031 Exchange Year-end Tips

 - 1031 Exchange Year-end Tips - Here's a couple year-end tips if you are considering a 1031 exchange. Did you know that if you open a 1031 exchange and your Accommodator is holding your funds before the New Year you get to defer any capital gain taxes due until 2014, even if you cancel your 1031 exchange? Since the 1031 exchange is concluded (or cancelled) in 2013, taxes (if applicable)* are ...


Cost Segregation Covers Closing Costs for the Commercial Real Estate Investor!

Cost Segregation Covers Closing Costs for the Commercial Real Estate Investor!

Cost Segregation Covers Closing Costs for the Commercial Real Estate Investor! There is a simple program that covers closing costs for qualified buyers of commercial or residential rental property. We use a tax strategy that generates 5% to 12% of the purchase price (or construction cost) of the building and land improvements. This strategy is called cost segregation, or cost seg. For those famil...


Cost Segregation and 1031 Like-Kind Exchanges

Cost Segregation and 1031 Like-Kind Exchanges

Is cost segregation a good idea to combine with 1031 Like-Kind Exchanges? First, what is a §1031 Like-Kind Exchange? A §1031 exchange, a.k.a. tax deferred exchange, is a simple strategy and method for selling one qualified property and then proceeding with the acquisition of another qualified property within a 180-day time period. The qualified property must be identified within the first 45 da...


Cost Segregation Benefits Medical Office Buildings

Cost Segregation Benefits Medical Office Buildings

Cost Segregation Benefits Medical Office Buildings Cost segregation benefits medical office buildings. By accelerating depreciation on all personal property, medical office buildings can provide Dr.’s with significant increases in investment income. It really is quite simple. IRS acquiesced to a lawsuit brought by HCA in Hospital Corporation of America v. Commissioner, 109 T.C. 21 (1997)("HCA"...


Cost Segregation Audit Techniques Guide

Cost Segregation Audit Techniques Guide

Cost Segregation Audit Techniques Guide   The Cost Segregation Audit Techniques Guide was developed specifically to assist IRS examiners in their review and exam of cost segregation studies. It was NOT, as many believe, developed to help cost segregation firms, or the layperson, perform a cost segregation study. It’s primary goals are to help these examiners understand: why cost segreg...


Cost Segregation Look-back Studies

Cost Segregation Look-back Studies

Cost Segregation Look-back Studies A taxpayer may prepare cost segregation look-back studies on existing assets and re-calculate the depreciation for prior tax years based on the reclassified asset costs. The IRS-Approved process for a taxpayer to change accounting method is the timely filing of Form 3115 (Request for Change in Accounting Method). Per Rev. Proc. 2002-9, 2002-3 IRB 327, a taxpaye...


Cost Segregation Benefits Hotel Property Owners

Cost Segregation Benefits Hotel Property Owners

- Cost Segregation Benefits Hotel Property Owners - Cost segregation benefits hotel property owners by accelerating depreciation on personal property. Personal property, for the purposes of cost segregation, are assets that enhance the real property, but are non-structural in nature. Examples of personal property for hotels would include carpeting and most flooring choices, decorative lighting...


Cost segregation increases debt-service coverage every time it’s applied

Cost segregation increases debt-service coverage every time it’s applied

Cost segregation increases debt-service coverage every time it’s applied. By applying cost segregation to any method of financing there will always be an increase in debt-service coverage…sometimes by 3:1 or more. In today’s shaky economy, when bank loans are nearly impossible to negotiate even for the best of credit risks, cost segregation provides the needed additional cash flow to make a...


A cost segregation study won’t benefit you if…

cost segregation study

A cost segregation study won’t benefit you if… • You are not profitable and pay no income taxes • You have paid no income taxes in the last 7 years • Your business is a non-profit organization (NPO) • Your building leases 50.1% of it’s space to a NPO • You plan on selling within the first two to three years of ownership • Your building cost under $100,000 to construct ...


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