The Magical World Of Cost Segregation
The Magical World ofCost SegregationPresented by Yonah WeissCost Segregation Expert
Presentation TopicsUnderstanding Cost SegregationOverview: Depreciation and CostSegregationWhat are the Benefits of a Cost Segstudy?What is Bonus Depreciation?Who should do a Cost Seg study?When is the best time?What is a Real Estate ProfessionalCase Study Stepping into the shoes of aMulti-Family Property OwnerSelecting a Cost Seg Provider About Madison SPECS .Specialized Property Engineering andCost Segregation The MCRES Family of Companies2
Depreciation and Cost SegregationAn Overview Property must be depreciated by tax law 39 years for Commercial property27.5 years for Residential property But there is a tax planning technique thatcan separate and accelerate property intovarious depreciable categories With Cost Segregation, property can bedepreciated over much shorter timeperiods: 5, 7, 15, and 27.5 or 39-yearcategories.3
Depreciation and Cost SegregationAn Overview 1,000,000 Purchase Price( 150,000) Land Allocation (15%) 850,000 Depreciable Basis4
Depreciation and Cost SegregationAn Overview 1,000,000 Purchase Price( 150,000) Land Allocation (15%) 850,000 Depreciable BasisStraight-Line Depreciation Deduction 21,794 (for 39 years) 30,909 (for 27.5 years)5
Cost SegregationFundamentals Must have a qualified engineer walk theproperty. Reclassify real property expenditures. Break out components that can bedepreciated over a shorter life. Accelerate tax depreciation deductions. Produce significant non-cash tax deductionsin the form of depreciation.6
Asset Classes5-Year Property15-Year PropertyPersonal-Tangible Building Mounted SignageCable TV Rough-inCloset ShelvingDecorative LightingDecorative MoldingsDryer Vent KitKitchen AppliancesRubber FloorSpecial Purpose PlumbingTelephone Rough-inVinyl Floors and BaseWindow TreatmentsSpecial Purpose ElectricalMailboxes Land ImprovementsMillworkMirrorCarpetingCeiling FanEquipmentFurniture Arbor/TrellisAsphalt PavingConcrete CurbingConcrete PavingConcrete SidewalkConcrete WallFencing MetalFencing WoodLandscapingParking BarriersPavement MarkingsPlayground EquipmentPoolStorm Water System RailingsRetaining WallSite FurnitureSite LightingSite SignageTennis Court
Cost Segregation BenefitsOn average, 1 Million of reclassified assets can generateabout 200,000 of after-tax cash savings for manyproperty types!*Reduces Tax LiabilityIncreases Cash FlowTime Value of MoneyBonus Depreciation* Note: The amount of tax savings varies based onmultiple variables of the property and owner.
Who should do a Cost Segregation Study?It applies to ALL real estate ownerswho are current income taxpayers. Individuals Estates and Trusts Corporations Partnerships LLCs9
Real Estate ProfessionalA DefinitionYou qualify as a REprofessional for the year ifyou OR YOUR SPOUSE metboth of the followingrequirements: More than half of the personalservices you performed in alltrades or businesses during thetax year were performed in realproperty trades or businesses inwhich you materially participated. You performed more than 750hours of services during the taxyear in real estateA real property trade or business doesany of the following with real property: Develops or redevelops it Constructs or reconstructs it. Acquires it Converts it Rents or leases it Operates or manages it Brokers it10
Passive Real Estate ProfessionalIf you do not qualify as a real estate professional, you areallowed up to a 25,000 passive loss if your MAGI is 100,000 or less (MFJ). The allowance fazes out at a rate of1:2 for every dollar over 100,000, completely fazing out at 150,000.
Tax Cuts andJobs Act of 2017
IRC §168KBonus Depreciation USED property now qualifies for bonus. NOTE: The effective date is September 28, 2017for property acquired and placed in service. The applicable bonus rate is 100% (instead of 50%)for assets acquired and placed in service afterSeptember 27, 2017 and before January 1, 2023.―Phase outs will begin in 2023.
CARES ACTNet Operating Losses Under the new law, an NOL can offsetnow 100% of taxable income in anygiven tax year. Carry forward andCarryback up to 5 years.14
When is the best time to do aCost Segregation Study?On a newlyconstructed propertyAfter the acquisitionof a propertyAfter a renovationor additionLook-back studyPurchased inprevious tax year15
Eligible Property TypesApartmentsAuto DealershipsGrocery StoresHotelsManufacturing FacilitiesMedical CentersOfficesResearch verage Reallocation Post Cost Seg Study (% of Basis)35404550
Case Study on Cost SegregationStepping into a Multi -Family Owner ’s shoes A multi-family propertyowner purchased a 32-unitgarden-style apartmentbuilding for 1,750,000 inNC. It was his first MFpurchase after many SFRs. Without cost segregation,the depreciation on thisproperty would have been 54,086 annually.17
Case Study on Cost SegregationStepping into a Multi -Family Owner ’s shoesPurchase price: 1,750,000Assets were reclassified as follows: 262,500 - Land allocation (15%)Non-Depreciable 1,066,192 – 27.5 year property (72%) 122,472 - 15-year property (8%) 298,836 - 5-year property (20%)Total amount of tax benefit: 421,30818
What should you look for in aCost Segregation Study?Principal Elements of A Quality Cost Segregation Study* Preparation By An Individual with Expertise and ExperienceDetailed Description Of The MethodologyUse Of Appropriate DocumentationInterviews Conducted With Appropriate PartiesUse Of A Common NomenclatureUse Of A Standard Numbering SystemExplanation Of The Legal AnalysisDetermination Of Unit Costs And Engineering "Take-Offs"Organization Of Assets Into Lists Or GroupsReconciliation Of Total Allocated Costs To Total Actual CostsExplanation Of The Treatment Of Indirect CostsIdentification And Listing Of § PropertyConsideration Of Related Aspects (e.g., IRC § 263A, Change in Accounting Method AndSampling Techniques)*Taken directly from the IRSCost Segregation Audit19Techniques Guide
About Madison SPECSSpecialized Engineering and Cost Segregation In-house team of over 50 experienced engineers,accountants and tax experts on staff – no need tooutsource Big-4 accounting firm leadership with deepexpertise 17,000 studies nationwide in the last 15 years 3 Billion in Tax Savings! 100% Audit Protection20
Questions
Contact UsFo r m o re i n fo r m at i o n a b o u t as p e c i f i c p ro p e r t y o r to re q u e st aco m p l i m e nta r y Fe a s i b i l i t y A n a l y s i s ,yo u ca n re a c h m e at :Yo n a h We i s s , C o st S e g re gat i o n E x p e r t732-298-9002 ory we i s s @ m a d i s o n s p e c s . c o mYo n a hwe i s s . co m
Principal Elements of A Quality Cost Segregation Study* *Taken directly from the IRS Cost Segregation Audit Techniques Guide. About Madison SPECS Specialized Engineering and Cost Segregation In-house team of over 50 experienced en
May 02, 2018 · D. Program Evaluation ͟The organization has provided a description of the framework for how each program will be evaluated. The framework should include all the elements below: ͟The evaluation methods are cost-effective for the organization ͟Quantitative and qualitative data is being collected (at Basics tier, data collection must have begun)
Silat is a combative art of self-defense and survival rooted from Matay archipelago. It was traced at thé early of Langkasuka Kingdom (2nd century CE) till thé reign of Melaka (Malaysia) Sultanate era (13th century). Silat has now evolved to become part of social culture and tradition with thé appearance of a fine physical and spiritual .
On an exceptional basis, Member States may request UNESCO to provide thé candidates with access to thé platform so they can complète thé form by themselves. Thèse requests must be addressed to esd rize unesco. or by 15 A ril 2021 UNESCO will provide thé nomineewith accessto thé platform via their émail address.
̶The leading indicator of employee engagement is based on the quality of the relationship between employee and supervisor Empower your managers! ̶Help them understand the impact on the organization ̶Share important changes, plan options, tasks, and deadlines ̶Provide key messages and talking points ̶Prepare them to answer employee questions
Dr. Sunita Bharatwal** Dr. Pawan Garga*** Abstract Customer satisfaction is derived from thè functionalities and values, a product or Service can provide. The current study aims to segregate thè dimensions of ordine Service quality and gather insights on its impact on web shopping. The trends of purchases have
Chính Văn.- Còn đức Thế tôn thì tuệ giác cực kỳ trong sạch 8: hiện hành bất nhị 9, đạt đến vô tướng 10, đứng vào chỗ đứng của các đức Thế tôn 11, thể hiện tính bình đẳng của các Ngài, đến chỗ không còn chướng ngại 12, giáo pháp không thể khuynh đảo, tâm thức không bị cản trở, cái được
MARCH 1973/FIFTY CENTS o 1 u ar CC,, tonics INCLUDING Electronics World UNDERSTANDING NEW FM TUNER SPECS CRYSTALS FOR CB BUILD: 1;: .Á Low Cóst Digital Clock ','Thé Light.Probé *Stage Lighting for thé Amateur s. Po ROCK\ MUSIC AND NOISE POLLUTION HOW WE HEAR THE WAY WE DO TEST REPORTS: - Dynacó FM -51 . ti Whárfedale W60E Speaker System' .
Le genou de Lucy. Odile Jacob. 1999. Coppens Y. Pré-textes. L’homme préhistorique en morceaux. Eds Odile Jacob. 2011. Costentin J., Delaveau P. Café, thé, chocolat, les bons effets sur le cerveau et pour le corps. Editions Odile Jacob. 2010. Crawford M., Marsh D. The driving force : food in human evolution and the future.
