The majority of cost segregation providers are conducting studies using the “Residual” method. Yet, it is difficult to find a single cost segregation provider advertising that they provide “Residual” Cost Segregation Studies. Why do you think that is? Perhaps it is because the IRS states that Residual studies are, “simpler and less time consuming” and “can also be less accurate”. The IRS further states that the Residual method, “generally does not reconcile project costs” and “can produce a skewed in result in favor of s1245 property”. Once you truly understand what a Residual Study is, you start to get a sense of why providers are not advertising that they use this abbreviated method. [Read more…]
Ghost Assets On The Books? Don’t Miss The Opportunity To Write Them Off!
Have you previously removed or replaced any structural components of your building(s) such as a roof, HVAC equipment, doors, windows, etc.?
If you, or your clients have, there are substantial benefits to conducting an Asset Retirement Study.
On December 23, 2011 the IRS and Treasury Department released the long awaited Temporary Regulations for Guidance Regarding Deduction and Capitalization of Expenditures Related to Tangible Property.
“The regulations revise the definition of Disposition for property subject to section 168 to include the retirement [Read more…]
2012 Tax Deadline Extended
January 4, 2012
Jan 4 – The Internal Revenue Service today opened the 2012 tax filing season by announcing that taxpayers have until Tuesday, April 17 to file their tax returns.
Federal Reserve Board Sees Improvement
January 1, 2012
National economic activity expanded at a modest to moderate pace during the period of late November through the end of December.
The reports suggest ongoing improvement in economic conditions in recent months, compared to late spring through early fall. [Read more…]
A Poorly Performed Cost Segregation Study can lead to IRS scrutiny Years Down the Road
As in the case of Ronald Pearce and Darryl Pearce versus the Department Of Revenue, State of Oregon. (CLICK HERE for the full tax case.) The plaintiffs chose to perform the cost segregation analysis for their rental apartment properties using the rule of thumb method. They believed their analysis was proper because of their experience in the apartment industry. The cost segregation studies were performed for the 2004 tax year. Years later, in 2006 and 2007 they were audited. Plaintiffs argued that the defendant could not examine a closed year, 2004, to determine the amount of deduction that should properly have been taken in 2006 and 2007.
In conclusion, it was decided that the defendant [Read more…]
Property Managers Can Build Client Relationships With Cost Segregation
Property Owners entrust Property Managers to maximize the return on their building investment. So why wouldn’t Property Managers suggest cost segregation as an additional cash flow benefit to the Property Owner?
Property Managers have all the viable property information to solicit a no cost, no obligation, cost segregation proposal that will lay out the benefits of cost segregation along with the costs to complete the comprehensive study. The Property Manager can present the proposal to the Property Owner and/or his or her CPA to [Read more…]