This weeks episode is dedicated to listener questions and answers!
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This is an almost 1.5 hour long Special Training Event SalesCast covering:
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In this episode we talk about the future of Cost Segregation
Today we are answering listener questions including:
Links referenced in the SalesCast:
Ask a Question or Share a Story for an upcoming episode. Open the GMG Savings App on your cell phone, click the “Contacts” tab, and share it today!
Two ways to listen each week:
Today we are answering listener questions including:
We will also be talking in great length about Introduction calls.
Links referenced in the SalesCast:
Ask a Question or Share a Story for an upcoming episode. Open the GMG Savings App on your cell phone, click the “Contacts” tab, and share it today!
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Everything you need to know about CPAs.
Plus, we start the episode with a story from David, an Advisor in PA.
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On this weeks episode we talk about Funeral Homes and why they are such a great candidate for Cost Segregation.
For the Q&A Segment we’ll be covering:
Plus, congratulations to two newer Advisors on their recent success.
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[blockquote]“Cost Segregation Studies are a lucrative tax strategy that should be considered in almost every real estate purchase.” -U.S. Treasury[/blockquote]
Ask a Question or Share a Story for an upcoming episode. Open the GMG Savings App on your cell phone, click the “Contacts” tab, and share it today!
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Depending on your answer, you could be getting bad advice which puts more money in the IRS’s coffers (and leaves less in your pocket).
Below is the crux of a typical tax preparer’s opinion regarding Engineering Based Cost Segregation Studies which an experienced CPA would say has kept many commercial property owners from implementing this highly beneficial tax strategy which is effectively encouraged by the IRS.
Here is a typical ‘tax preparer’ statement to commercial property owners:
“You are not getting additional depreciation, you are accelerating depreciation by allocating cost to shorter life. I advise against such a strategy as there can be future tax implications and also there is upfront cost involved.”
For frame of reference, here is the IRS’ view (from www.irs.gov) on cost segregation:
“Buildings and structural components have substantially longer depreciable lives than personal property. Therefore, it is desirable for taxpayers to maximize personal property costs in order to accelerate depreciation deductions and, hence, reduce tax liability.” (source)
Here’s how many experienced CPAs would look at this matter:
The above point of view isn’t considering the bigger picture. For instance, only looking at the (potentially) negative capital gains tax implications associated with cost segregation by itself is ‘missing the forest for the trees’:
So, in fact, the depreciation isn’t lost in reality. Plus, only about 20% of the building can be ‘accelerated’…the remainder stays in 39-year S/L.
So, do you have a ‘Tax Preparer’ or a CPA? The best way to find out is to ask him or her how they perceive the value of an Engineering Based Cost Segregation Study for a commercial property owner.
To stream a 3-minute video regarding this topic, please click here.
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On this weeks episode we talk with Jeremy Harrison about What Cost Segregation is, and who the best candidates are.
For the Q&A Segment we’ll be covering:
Plus: An Advisor from California shares a story about a few recent clients, and what he’s doing to build referrals.
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The IRS Is Trying To Help Funeral Homes Pay Them Less! (Don’t believe it? – read on)
This statement is directly from www.irs.gov, “Buildings and structural components have substantially longer depreciable lives than personal property. Therefore, it is desirable for taxpayers to maximize personal property costs in order to accelerate depreciation deductions and, hence, reduce tax liability.”
This largely overlooked tax strategy often reaps over $100,000 in tax benefits for a typical funeral home.
This strategy dates back to 1959 when the U.S. Tax Court allowed building owners to pursue component-based depreciation. In 2004 the IRS established a ‘Cost Segregation Audit Techniques Guide’; the Guide provides clear direction regarding how to establish the cost basis for non-structural building components and which depreciation time-lines to use for electrical wiring, plumbing, partitions, carpeting, finishes, parking lots, landscaping (and other qualifying components).
Think of it this way; why depreciate, say, carpeting in a 39-year time-line as if it were a structural steel beam? The IRS allows building owners to depreciate many such items in a more appropriate 5-year time-line. In fact, roughly 20% of your Funeral Home could likely be moved from 39-year to 5-year time-lines!
And just when you think you’ve died and gone to heaven (a little Funeral Home industry humor), it gets better! The IRS allows you to move such depreciation that you didn’t claim in years past, so-called ‘catch-up depreciation’, into your current tax year without having to do an amendment. Your CPA can move this ‘catch-up’ figure to your current tax year through a simple 481 change in accounting method.
The IRS recommends that building owners wishing to take advantage of this logical and well-established tax strategy conduct an Engineering Based Cost Segregation Study which documents:
The Study also places each component in the appropriate time-line per the IRS Guide.
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