If you own your building, you may be sitting on untapped tax savings
Let Hayley Capital and our team of specialists review your existing property to see how many depreciable items you have within your building that will allow you to save on your taxes and increase your cash flow. Order a FREE report today and uncover your savings!
Just purchased an existing building? The savings can start today!
No matter the age of the building, if you purchased the building within 15 years, our fully engineered study could help you reduce your taxes and add cash flow to your business when you need it most – now! Our experts can review your building’s potential.
New Commercial building owners reap significant benefits
Why wait 5, 10, 15, 39 years to gain the tax advantage of your new property when you can use a fully engineered study to reduce your tax and add cash flow to your business NOW! Our experts can review your building’s potential and deliver a full report that will have you saving on taxes today… when you need it most and this review is FREE!
Don’t own your building, but have over $400,000 in build out?
Put our fully engineered study to good use with your leasehold. There are many depreciable items within your building that will allow you to save on your taxes and increase your cash flow. Complete form for a FREE estimate.
SEGREGATING THE BUILDING
Cost segregation, or allocating costs or values of a building’s components into appropriate classes of personal property to shorten their depreciation recovery period, can be applied to buildings used in a business that were recently constructed, purchased, expanded or remodeled by the taxpayer. In addition, cost segregation can be used for buildings that have been in service for some time. For buildings already in service, depreciation deductions for prior years can be recomputed, and a one-time catch-up provision (a Sec. 481(a) adjustment) allows a current-period deduction for the difference between depreciation deducted to date and that which could have been deducted using cost segregation (Rev. Proc. 2002-9), no amending of prior-year returns. The IRS has taken the position that a change in recovery period is a change in accounting method. Hence, to implement the catch-up provision, we complete the required and timely filed Form 3115, Application for Change in Accounting Method. For buildings that have been sold in a prior tax period, the taxpayer must also be eligible to file an amended return for the tax year of the sale.
Change of Accounting Method (the Catch-Up Provision)
When a cost-segregation study is completed for a building that is already in service, it will result in finding depreciation deductions that could have been deducted over the time now lapsed. Accelerating these deductions is a very attractive reason to conduct a study. The difference between what was deducted and what could have been deducted is known as an IRC Section 481(a) adjustment. The good news about these adjustments is that, pursuant to Internal Revenue Service Ruling 2002-19, the whole difference is deductible in the year that the study is performed, provided that Form 3115 is filed for that year.
Other Benefits of Segregating Costs
There are many other advantages to a cost-segregation study in addition to the immediate tax savings and cash-flow increase. Two potential side benefits to cost-segregation studies are potential property insurance cost savings and estate planning advantages.
By providing a cost-segregation report to your insurance underwriter, the insurance company can better understand and focus on its risk, and more accurately underwrite the insurance cost. These potential insurance cost savings result in more money in your pocket.