If you’re a hotel owner looking to earn tax savings on your property, there are two lucrative tools that can help you achieve this goal.
The 179D Energy Efficient Tax Deduction and Cost Segregation Studies (CSS) are two of the most important tax benefits when it comes to saving and earning money on hotels. Here at National Tax Group, we can walk you through these specialty tax services and make sure you are taking advantage of what each of these tools can do for your property.
How Do 179D Tax Deductions Apply To Your Hotel?
179D is a tax provision created in 2005 that allows newly constructed or renovated buildings that have installed energy-saving elements to collect a tax deduction of up to $1.80 per square foot of property.
For hotels who have implemented and constructed “green” features into their buildings, (hot water systems, building envelope systems, HVAC systems, interior lighting systems, insulation in ceilings, walls, floors, and roofs, ect.) they can be rewarded with this tax deduction.
Understanding what features of your hotel’s construction or renovation qualifies as energy efficiency improvements can be difficult, however. That is why hiring a team of tax specialists to comb through the more difficult parts of this process is a huge help. Here at National Tax Group, we make it easy with an in-depth study of your project and how each eco-friendly installation will qualify for this deduction.
Why Should You Perform A Cost Segregation Study On Your Hotel Property?
Cost Segregation studies are one of the most strategic tax planning tools that a property can perform to help improve their cash flow.
These engineering-based studies help to accelerate property depreciation and allow for real and personal property to be reclassified. Through this study, hotel properties can reallocate 30% of the total assets turning a typical 39 year depreciable asset into a 15 or 5 year depreciation time.
Here at National Tax Group, our team of engineers and tax experts performing these studies go by the Modified Accelerated Cost Recovery System (MACRS), which is the method of depreciation that is mandated by the IRS. The MACRS is applied to short-life assets, which accelerates depreciation and reduces the tax burden of the hotel owner. These personal property hotel assets can include flooring choices, decorative lightning,
electrical, plumbing and security systems, landscaping, power generators, parking lots, and more.
If your hotel was purchased or constructed since January 1st, 1987 or has been recently remodeled, it could qualify for accelerated depreciation.
Let National Tax Group Help You Gain Massive Savings
Our team of experts have worked with hundreds of hotel owners to enhance their savings and increase their cash flow. We offer a wide range of services and talents to help make sure you’re capturing all the hidden capital your hotel has to offer. Give our team a call at (561) 257-3436 to set up your free initial assessment.