Apartment Building Owners...Did you know?
Unique legislation provides incredible savings for you!
It’s your money, claim it!
We urge Apartment Building Owners to claim the advantage of the bonus depreciation allowances available through legislation!
Cost Segregation Studies offer savings for Apartment Owners.
A unique provision in the Job and Growth Tax Relief Reconciliation Act of 2003 allows owners a one-time 50 percent deduction of cost of assets for those with a classified life of 20 years or less. The remaining capitalized cost is depreciated over the appropriate recovery time.
This is just one development in the continued refinement of apartment-related tax benefits through Cost Segregation. This means assets are classified for a 5, 7, or 15-year write-off time period rather than the previously specified 27.5 years. What a savings in building and acquisition costs.
This also means that reducing the deduction periods for assets increases the building value for investors because less is paid in taxes and cash flow is increased. The assets remain classified in Cost Segregation when the building is sold.
What is cost segregation?
Cost Segregation is an engineering view to re-classifying assets within a building or property that can be shifted to another much shorter depreciation class. It is like sorting your property into different categories not used before. It is dividing the components of the property so that the usual 27.5 years of depreciation is much less allowing no taxes paid on a long term basis.
Why can’t my accountant perform the analysis?
The IRS requires that the cost segregation study be performed an expert: an engineer an architect, an appraiser or a certified cost estimator, competent in auditing, finance, design and construction. Our company has engineers with accounting backgrounds who perform our studies. They confer with our appraisers, licensed tax consultants, architectural engineers and property inspectors.
Our experts are knowledgeable about commercial property, especially apartments including all items from special millwork, electrical systems, drains, sidewalks, carpet/vinyl/tile, paving, lighting, special piping and decorative trims to land improvements. They know building standards and local laws and procedures.
More Money in Your Pocket
Apartment Buildings may realize incredible savings, in the thousands, because previous studies discovered that 20-35% of apartment building assets may be re-classified. Equipment such as furniture and computers are easily identified for decreased five and seven-year depreciation periods. Cost Segregation isolates items with shorter lives rather than consolidating them into a common structural real property item.
The "five to fifteen" assets may include wall covering for a lobby, which has a five-year depreciation period while wood paneling is depreciated over 27.5 years. Experts on our staff know these minute facts. Parking underground or above ground? Gutter work? Portable cabinets? Heavy-duty or home consumer light fixtures? It's not just brick and mortar in cost segregation. Any apartment building purchased or improved since 1987 qualifies for cost segregation savings.
No amendment to taxes required!
In most cases, it is not necessary to amend prior tax returns. Our experts will assist you in filing Federal Form 3115, an "Application for Change in Accounting Method." There is not a filing fee. Our experts know how to recapture your monies.
Clients receive present-value cash flow savings of at least ten times the fee of cost segregation studies. Our in-depth studies are considered some of the most thorough and reliable in the country.
For example, the present value of the increased cash flow is approximately $200,000 for every $1 million of property that is re-classified to acquire faster depreciation. For a $2 million apartment building, this results in approximately $100,000.
Call us or contact us for a free estimate today! Let our expert staff guide you through Cost Segregation.
