Commercial real estate owners can use strategic tax tools to minimize their tax liability and reap tremendous savings.
When it’s time to cut costs, business owners will often turn to their books to assess where they can save. Oftentimes, their first step is to cut investments, wages, or plans for growth. However, a Cost Segregation tax service makes it possible to receive a massive return on taxes without cutting costs to business assets and daily operations. It can also spare owners from having to negotiate a new growth strategy.
What is Cost Segregation?
Cost segregation is a lucrative tax strategy that allows business owners to maintain their current spending and save significant tax dollars on top of what they’re already earning.
Some components of a building depreciate at a faster rate than others, and need to be replaced before their typical 39-year depreciable life. During a study, real property is reclassified as personal property in order to accelerate depreciation, normally from 39 or 27.5 years, down to 5, 7 and 15 years. Once a Cost Segregation Study is performed by a licensed tax engineer and the refund is awarded, business owners are free to invest in higher quality improvements or assets that make a real difference.
Who Qualifies for a Cost Segregation Study?
A Cost Segregation Study can be particularly useful to professionals that own traditional commercial buildings, but it also massively beneficial to owners in the following industries:
- Assisted Living Facilities
- Auto Dealership
- Hotel and Hospitality
- Food & Beverage
- Indoor Farming
If Cost Segregation is paired with other tax incentives, such as 179D, the savings could multiply.
What is the First Step?
An IRS audit-proof study should be performed by engineering tax specialists with years of experience.
The study will itemize some structural components of the property that are both permanent, such as building structure, and changeable, such as flooring. Other components could include the following:
- HVAC systems
- Bathroom appliances
- Pipes and Plumbing
- Temporary walls
The depreciation period for these components will also be separated out. Our staff can survey property on-site anywhere in the country, and draw up a detailed report. Even though the current tax season is over for many, lucrative savings can still be uncovered in the form of an amended tax return.
The potentially monumental benefits can be the difference between a good fiscal year and a great one. Call National Tax Group at (561) 257-3436 a free initial consultation.