Using Cost Sharing: How to Speed ​​Up Tax Deductions for Commercial Property Owners

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Time is money, and if you own a commercial property with real estate worth at least $ 500,000, cost sharing research can free up money for you as soon as you file your next tax return.

BeachFleischman provides cost-sharing services to clients nationwide and we have offices in Phoenix and Tucson, Arizona. We consult with commercial property owners to increase cash flow, reduce their tax liabilities and check for missed deductions. We have the experience and technical expertise to conduct research with favorable results in line with IRS guidelines. In addition, our professionals are well versed in real estate tax law, tax depreciation and cost segregation taxation issues. We partner with qualified engineers to ensure that our clients receive the maximum allowable tax credits for every research we conduct.

Why Invest in Cost Segregation Research?

Ashley T. Baima is Senior Tax Manager at BeachFleischman.

• Cost segregation study is a specialized method of accelerating the depreciation of commercial real estate to increase cash flows.

• The engineer examines the property to determine how parts of the building can be reallocated for shorter depreciation periods (eg 5, 7 and 15 years); compared to the typical 27.5 and 39 years of amortized life of residential and non-residential commercial property, respectively.

• By reallocating a portion of the original depreciable life to an inexpensive property, accelerated depreciation can generate significant tax and cash flow savings. Estimate your property’s tax savings with our cost sharing calculator

• BeachFleischman provides a full range of cost segregation services. We conduct research from start to finish, coordinating with engineers and delivering comprehensive results ready to be included in your tax returns.

How much can savings in taxes cost?

• Tax savings will vary depending on the design of the building, how it is used and when it was commissioned. These factors will affect how the amortized life is reallocated.

• If the property was commissioned several years ago, the reallocation of the amortized life can usually be adjusted in the current year without changing previous tax returns. This can lead to immediate tax savings for owners.

Try our cost sharing calculator to find out how you can generate significant cash flow in the form of tax savings.

• Below are the approximate results of our calculator for a $ 1,500,000 residential complex commissioned in December 2020. Tax savings in 2020 will amount to approximately $ 143,000.

• Below are the approximate results of our $ 800,000 retail building calculator commissioned in January 2018. Tax cuts in 2020 will amount to approximately $ 63,000.

Who is a good candidate for cost segregation research?

• Any commercial real estate taxpayer can potentially benefit from cost sharing research.

• As 100% of the depreciation charge from bonuses is phased out in 2023, it is more important than ever to consider conducting a cost-sharing study.

Try our calculator, or let us prepare a free cost-sharing feasibility study for you to determine your potential benefits from completing a cost-sharing study. For more information on our cost-sharing services visit us at http://www.beachfleischman.com/costsegregation or contact Ashley Byme by phone abyma@beachfleischman.com

Ashley T. Baima is a senior tax manager at BeachFleischman and a licensed public accountant in Arizona. In addition to running a cost-sharing service line, Ashley provides accounting and tax services to a number of private companies.

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