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When New Clients Wave Red Flags—2 Signs Your New Client Got 263(a) Wrong

Posted by Don Warrant on 7/22/15 9:07 AM

If you’re onboarding a new commercial real estate client this summer, be sure to check tangible assets on the tax return

tangible_property_regs-4Summer isn’t just about quality time at the pool or the golf course. It’s also about quality networking time focused on growing your practice. Lots of calendar-year taxpayers are coming off of their annual experience with their tax preparers, and some of them are bound to be testing the waters to see if a new accountant might be a better fit. If you’re fortunate enough to be adding clients that own tangible property, especially commercial real estate clients, there are 2 key signs that they may have missed a significant tax-saving opportunity under the new 263(a) regs.
 
1-Does the Return Include a Form 3115?

If your new or potential commercial real estate client has already filed a 2014 tax return, that return should include a Form 3115, Application for Change in Accounting Method. If it doesn’t, the good news is that most clients can still file that form up to the extended due date of the original return. And the even better news is that you will likely be able to help them get a significant refund as a result.
 
2-If the Return Includes a Form 3115, Is There a 481(a) Adjustment?

If you onboard a new client or talk to a potential client who did file a return with a change in accounting method, you need to review that adjustment. The new regs under section 263(a) require affected businesses to change their accounting methods (Form 3115) and to adjust the basis of many existing assets to reflect that change (Form 3115—Part IV, Section 481(a) Adjustment). If you review a return for a new client that includes the change in method but not the adjustment, it’s likely that there is a mistake involved that needs to be corrected before the extended deadline for the return.
 
263(a) opportunities Even if the Form 3115 has been filed and a 481(a) adjustment has been claimed, it’s important to review the previous accountant’s work in calculating the adjustment. The one-time catch up adjustment for businesses that change accounting methods under the new rules has generated more than its share of confusion and errors this year.
 
If you’re looking at new clients that have tangible assets, you might want to consider getting a second opinion on the 481(a) adjustment from CSP360. Our professionals focus on tax issues affecting commercial real estate clients. We have helped many accounting firms that wanted an extra set of eyes on this issue at this critical time. If you have any questions or concerns about how the new rules may have affected your commercial real estate clients or prospects, a consultation with CSP360 could help you to better serve your client.

Tags: 263(a) regulations, tangible property regulations

Time Is Running Out to Get 263(a) Elections Right

Posted by Don Warrant on 7/14/15 8:59 AM

The Window of Opportunity on These Tax-Saving Elections Closes This Fall

263aThe weather’s heating up. It feels like time for that midsummer lull between the spring tax season everybody knows about and the fall extension deadlines that wreak almost as much havoc on a CPA’s life without the relief of occasional tax jokes from late-night hosts. There’s a big difference this year, though. Any clients with depreciable property on their returns needed to make changes in accounting methods and consider making elections under new regs for their 2014 returns.
 
Taxpayers who already filed their returns can still make changes to those returns to take advantage of the tax saving opportunities or to include a missed election using the automatic extension procedures. Given the scope and complexity of the new rules, it makes sense to take a second look at the returns of your affected clients to make sure that the new rules were followed correctly. With the amount of potential tax savings at stake, you may want to consider having a second set of eyes that are focused on this issue reviewing those returns.
 
Most commercial real estate businesses are likely to see a significant impact from the regs. Given the constant need for repairs, replacements and maintenance on buildings, these clients need to make sure that they have correctly implemented the accounting method changes and claimed the related adjustments. Because the IRS will continue to release guidance this year, CPA firms should continue to consider this an important topic to discuss with clients.
 
If you’re confident that your firm got this complicated compliance initiative right for all of your clients, by all means hit the beach or the mountains or go wherever you need to go to relax this summer. If you’re wondering whether there’s a possibility you may have missed something and you want to consult with a professional who is focused on helping CPAs provide the best service possible to commercial real estate clients, a consultation with CSP360 might make your time off much more relaxing.
 
263(a) opportunities Just remember, the automatic extension procedures don’t close gradually over time and remain open for some people in certain circumstances. This window of opportunity slams shut on the extension date for the original return—either September 15 or October 15 for calendar year taxpayers. If the taxpayer didn’t file a Form 3115 with their 2014 tax return then the taxpayer has effectively made all of the method changes for tangible property without the benefit of a tax deduction. That is most likely not the best option for the taxpayer. Similarly, if the taxpayer filed a Form 3115 with their 2014 tax return reporting a $0 Section 481(a) adjustment, they have not taken advantage of the tax savings opportunities and may not have complied with these regulations. Now is the time to fix those returns if necessary.
 
These normally quiet months for tax practitioners can be a critical time for some clients. If you have any questions or concerns about how the new rules may have affected your commercial real estate clients or prospects, a consultation with CSP360 could help to put your mind at ease.
 

Tags: 263(a) regulations, tangible property regulations

How to Pitch a Cost Seg Project to a Commercial Real Estate Client or Prospect

Posted by Don Warrant on 5/25/15 9:19 AM

Establish credibility by demonstrating cost segregation tax law and engineering expertise—then show them the money!

cost_seg-1
Last week we talked about how to qualify a commercial property owner as a strong prospect for accelerating depreciation deductions through a cost segregation study. Now how do you position your firm as the right solution to deliver those tax benefits?
 
In our experience, CPA firms are often strong contenders for cost segregation projects, primarily because they already have strong relationships with their existing clients and typically are not in a competitive bid situation. Even when pitching to a non-client, most accounting firms have a leg up over boutique cost segregation providers because CPAs typically are known in their markets for both integrity and tax know-how. However, general tax knowledge and trustworthiness usually are not enough to convince savvy commercial real estate owners to sign on the dotted line.
 
To win a seat at the table and get a chance to quote on a cost segregation project for a client or prospect, you need to demonstrate three important things:
  1. Understanding of the relevant tax code and case law.
From the 1997 Hospital Corp. of America Tax Court ruling to the January 2015 Louisiana district court ruling on placed in service dates, commercial property owners need confidence that your firm has access to the most up-to-date knowledge of relevant case law. For CPAs that haven’t already dedicated the time and resources to research this ever-evolving area of the tax code, partnership with a reputable cost segregation specialist might be the best path to delivering this service line.
  1. Engineering experience and industry expertise.
Just like snowflakes, every building has different features. That’s why cost segregations that rely on industry averages or “rules of thumb” are likely to be inaccurate and subject to restatement upon IRS examination. Cost segregation studies based on either actual construction costs or estimates based on engineering expertise, on the other hand, are more likely to generate depreciation deductions that are not only accurate and defensible but also more comprehensive—so the client will not be leaving money on the table.
 
Again, the backing of an established cost segregation strategic partner is the best route to give your client or prospect confidence that you will deliver the full package of tax minimization and IRS audit defense.
  1. “Show me the money.”

When it comes down to it, commercial property owners are most interested in knowing how much they can expect to save on their taxes in the next few years. In general, we find that tax-paying owners of commercial buildings with a tax basis of $1 million or more see accelerated depreciation deductions that add up to at least 10 times the cost of the study. With just a few pieces of data, a reputable and established cost segregation firm can provide a detailed estimate of anticipated tax benefits. 

Preparing a Cost Segregation Quote

Once you have clearly demonstrated your firm’s credentials, you are ready to prepare a quote for the project. Different CPA firms take different approaches. Some provide an estimate of their time on top of the cost seg specialist’s fee, and others give the client a package quote that allows them to value bill for their role in delivering the cost segregation study. (Remember that the only pricing strategy that is completely off the table is a contingent fee.)
 
For most CPAs, however, the true pot of gold at the end of the rainbow is the ability to keep competitors at bay and delight an important client with accelerated deductions that improve the owner’s cash flow.
 
cost seg prosposal template Do you have a commercial real estate client or prospect who could benefit from a cost segregation study? Download our cost segregation data collection form, and we’ll give you a call to walk you through it and discuss how we can help you close on that opportunity and (most importantly) deliver valuable tax benefits to that building owner.

Tags: cost segregation, Don Warrant

Post Tax Season 263(a) Opportunities to Get New Clients from Competitors

Posted by Don Warrant on 5/22/15 9:03 AM

Don’t let competitors use a letter like this to steal your clients.

Most accountants spend the end of April and early May catching their breath and letting the dust settle from the spring filing season. Once you’ve cleaned up and started planning for the summer, remember that there’s a very rare opportunity this year related to the 263(a) tangible asset rules. Taxpayers who timely filed their 2014 federal tax returns receive an automatic extension of time to amend their tax returns to file Forms 3115 and make late elections.
 
Most commercial real estate businesses are likely to see a significant impact from the regs. Given the constant need for repairs, replacements and maintenance on buildings, these clients need to make sure that they have correctly implemented the accounting method changes and claimed the related adjustments. Because the IRS will continue to release guidance even after the filing season has ended, CPA firms should continue to consider this an important topic to discuss with clients. For example, the rules on building refresh’s are still evolving and IRS guidance is expected anytime.
 
You may very well be on top of things and maximizing any 263(a) opportunities for your clients. On the other hand, if you are behind the curve, you’ve opened up a tremendous window of opportunity for a more aggressive competitor to poach clients.
 
Given the complexity of these rules and the fact that significant pieces of guidance have yet to be released, the next few months are a great time for your firm to aggressively reach out to potential clients about their 263(a) opportunities. For example, if they already filed, explain how you can help them capitalize on a missed opportunity under the automatic extension procedures. If they are on extension, then their current tax preparer may not have pinpointed the tax savings opportunities, carpe diem (seize the day)!
 
Here’s what that letter from an aggressive accounting firm to your client might look like.

263a

We’re pretty sure that you would be very displeased if one of your clients got a letter like this, but your clients are fair game for firms that can deliver more tax advantages from an opportunity with an ever closing window.

This opportunity to amend 2014 tax returns under the automatic extension period might be missed by other tax return preparers. But it’s also an opportunity that some of your competitors may seize if you don’t.

If you would like to evaluate your clients’ plan to comply with the new rules for tangible property, we can help. Contact us to schedule a consultation.

For more on this topic, be sure to download our whitepaper, “Using the New Tangible Property Regs to Help Clients and Gain New Business

Tags: 263(a) regulations, tangible property regulations, accounting method changes, Form 3115

4 Pieces of Data You Need to Qualify a Cost Segregation Opportunity

Posted by Don Warrant on 5/20/15 9:03 AM

Tax-Saving Formula: A + B + C + D = $$$

cost_seg_tax_savingWe've talked about when cost segregation might not be right for your commercial real estate client or prospect. So how do you know when cost segregation is the right answer?
 
At CSP360, we rely on a few key pieces of data to estimate the tax savings a commercial property owner can expect as a result of accelerated depreciation. Here are the 3 most important inputs into that equation:
 
  1. The physical attributes of the property. You’re probably already aware that certain types of buildings naturally have a high proportion of shorter-lived assets. For example, hotels, restaurants, golf clubs and other hospitality-oriented businesses tend to have lots of furniture, fixtures, and other finishing touches that qualify as Sec. 1245 property. Did you also know that location factors large in the cost-benefit equation? If the building is on a city block surrounded by city-owned sidewalks, then the opportunity to take accelerated depreciation for land and land improvements is severely limited.
  1. The federal tax depreciation schedule for the property owner. A cost segregation tax specialist will need to see how the property currently is being depreciated on schedules submitted to the IRS (as opposed to schedules used internally or for financial statement purposes). If the property is primarily being depreciated over 39 and 27½ years, that owner is more likely to be able to reap the benefits of a cost segregation study.
  1. The property owner’s tax-paying history. Clients that expect negative adjusted gross income or those that will only have passive rental income will not be able to benefit from accelerated depreciation deductions.
  1. The tax basis of the property. The cost-benefit calculation generally works out best for buildings with a tax basis of $1 million or more. However, owners of buildings with a high proportion of nonstructural elements (e.g., hotels, restaurants, apartment buildings) often can justify a study with an even lower tax basis.
 
cost seg prosposal template Of course, the right answer can’t be boiled down to a simple formula. Every situation is different and depends on many factors, such as how the property was acquired and how long the owner plans to hold it. A successful cost segregation—one that results in the greatest amount of accelerated depreciation that also will stand up to IRS scrutiny—requires extensive knowledge of cost segregation tax law as well as industry-specific engineering expertise. Success also relies on the CPA’s intimate knowledge of the building owner’s specific circumstances and tax situation.
 
If you think your commercial property owning client or prospect could benefit from a cost segregation study, we can help qualify that opportunity. Request our cost segregation data collection form and get started today.

Tags: cost segregation, Don Warrant, tax saving opportunities

Is 179D Tax Deduction Right For Your Commercial Real Estate Client or Prospect?

Posted by Jennifer Birkemeier on 5/12/15 9:28 AM

Here are 3 pieces of data you need to tell if a 179D study will generate at least 10-to-1 ROI.

179D_tax_deductions_for_commerical_real_estateGreen is the new black, and chances are good that your commercial real estate clients and prospects have replaced windows, HVAC units, or lighting in the past few years with more energy-efficient models.
 
The status of the 179D tax deduction for energy efficient commercial buildings currently is in limbo for 2015 and beyond. However, this perennial “tax extender” is a popular one that enjoys broad support, and so it will most likely be implemented retroactively for the 2015 tax year.
 
Digging for just a few pieces of information now will allow you to see if your commercial real estate clients would benefit from this valuable tax deduction (up to $1.80 per square foot) that can generate ROI for the property owner of up to 10 times (or more) the cost of the study.
 
The pieces of data you will need to perform a 179D analysis include:
  1. Square footage of the building and the energy efficient improvement or addition.
Ask the client or prospect for architectural drawings of the buildings to get an accurate measurement of the overall square footage and the size of the addition or improvement. Generally, because 179D requires an independent certification by licensed engineer licensed and thorough modeling for each individual building, the building should be at least 30,000 square feet for the benefits to outweigh the costs of the study.
  1. Technical specifications on efficiency improvement.
Next, you will need the technical specifications about the energy efficiency of the new unit. The engineer will compare each building’s performance to government standards to determine if it reaches the required threshold of energy savings.
  1. Invoices for energy-efficient upgrades and additions.

Currently, the maximum 179D tax deduction is $1.80 per square foot for buildings that achieve the threshold of 50% energy and power cost savings for the whole building, or $0.60 per square foot for partially qualifying property. However, the deduction is capped at the taxpayer’s actual costs for the improvements. So to determine whether the deduction will or will not be worthwhile, you will need the client’s invoices for the improvement project or new building. 

Do the Benefits of 179D Outweigh the Costs?

Once you’ve gathered all these pieces of data, you can use the U.S. Department of Energy’s 179D calculator to estimate the potential tax savings for your client.
 
Buildings of at least 30,000 square feet that meet the government’s technical specifications typically generate ROI of at least 10 times the cost of the 179D study. However, since the lookback on this deduction goes all the way back to January 2006, commercial property owners that have performed efficiency upgrades over multiple years might see even better returns, in some cases closer to 20-to-1.
 
If you would like to evaluate your clients’ previous or upcoming building or renovation projects to determine whether they qualify for the 179D tax deduction, we can help. Contact us to schedule a consultation.

Tags: commercial real estate, Section 179D, Jennifer Birkemeier, tax saving opportunities

3 More Things That Might Surprise CPAs About Cost Segregation

Posted by Jennifer Birkemeier on 5/6/15 9:13 AM

Owners of commercial property can realize 20-to-1 ROI on cost segregation study performed by a firm with engineering and tax expertise.

Cost_segregation_heroYou know that a cost segregation study can uncover opportunities to slash your commercial real estate clients’ tax bill. But there might still be a few questions lingering in your mind about whether the benefits of cost segregation outweigh the time and expense of the study. For the right types of commercial property owners—and by working with the right cost segregation strategic partner—a cost segregation study can deliver higher ROI and require less time and effort from you and your client than you might think.

Surprisingly Good ROI for Clients and Prospects

We tend to be conservative when we estimate a client’s potential tax savings from cost segregation. We typically tell our CPA firm partners that their clients can expect a return on investment of at least 10 times what they pay for the study.
 
But for owners of properties with a high proportion of nonstructural elements—such as hotels, restaurants and manufacturing facilities—segregating those shorter-lived assets often generates tax deductions that add up to 20 times what they pay for the study.
 
Of course, the opportunity to realize that high ROI will depend on whether the cost segregation provider brings to the table both tax and construction engineering expertise.
 
Consider this: As a CPA, you have been trained to pick depreciable assets out of a balance sheet. But do you know how to read blueprints to identify all of the elements that qualify for shorter depreciable lives? Probably not.
 
Construction engineers know what lies behind the walls of a building—the miles of wiring, ductwork and plumbing that could qualify for 5-, 7- or 15-year depreciation. When you partner with a cost segregation provider that has the combined knowledge of cost segregation tax specialists and engineering professionals, your client or prospect is more likely to benefit from higher ROI, and you will cement that relationship for your firm.

Minimal Disruption to You and Your Clients

Maybe you’re worried that the cost segregation study will suck up time and resources that you and your client don’t have to give. Actually, experienced cost segregation engineers know how to minimize the disruption of their site visits. Engineers who are experienced with the type of property in question often require only a quick introduction to the site by a property maintenance manager and conduct the remainder of the site survey independently.
 
An experienced cost segregation firm also will make the process easy for you and your tax team. Once the cost seg specialists have the final cost for the finished building, either from the owner’s general ledger or a final invoice from the contractor, your involvement is over until you receive the final depreciation numbers to factor in to the client’s tax return.

Higher Profit Potential for Your Firm

Tax slashing hero Here’s the great news for you: Because cost segregation often generates significant ROI for commercial property owners and requires little investment of time on your part, your firm’s profit potential skyrockets. Not only do you have opportunities to value bill for time you spend consulting with your client on these lucrative tax opportunities, but you have also positioned your firm as the go-to resource for progressive, tax-slashing solutions.
 
Ready to become a tax-slashing hero for your clients and prospects? Learn more about the benefits of performing cost segregation in our whitepaper.

Tags: cost segregation, Jennifer Birkemeier

3 Things That Might Surprise You About Cost Segregation’s Tax-Slashing Potential

Posted by Jennifer Birkemeier on 4/28/15 9:19 AM

What you don’t know about tenant buildouts, asset abandonment, and bonus depreciation could cost your clients tax benefits.

cost_segregationWe performed our first cost segregation study for a property owner 20 years ago—and my, how the discipline has evolved since those early days.
 
We’ve learned quite a few things along the way. Here are a few that might surprise you and delight your commercial real estate clients and prospects.
 
  1. Tenant’s build outs reinforce tax savings.
Leasehold improvements represent a wealth of tax deductions for property owners. Because these build outs typically do not involve the building shell, a high percentage of those costs typically are for tangible personal property. The only way to claim those depreciation benefits? Allocate costs to their proper asset groups through a quality cost segregation study.
  1. When abandonment is a good thing.
Most tenant build outs involve replacing an asset. If the old asset is still being depreciated, then the property owner might be able to write off the remaining tax basis of the asset that is being disposed of. There are two prerequisites to take advantage of this tax benefit: First, the new asset must be capitalized (i.e., you can’t deduct both the new and the old asset). Second, the cost of the abandoned asset must be specifically identified. So once again, cost segregation saves the day!
  1. A bonus surprise.

You probably already know that property owners can take bonus depreciation on personal property with a depreciable life of less than 20 years. (Currently, bonus depreciation is available only for assets placed in service in 2014 and earlier.) You also know that cost segregation identifies assets that qualify for shorter depreciable lives.
 
By conducting a cost segregation, your client benefits from accelerated depreciation for newly segregated personal property AND ALSO a bonus depreciation deduction on those assets.
 
And there’s even better news. Property owners can go all the way back to 2001, when this particular benefit came into law, to claim bonus depreciation on tangible personal property placed in service in previous years.

Tax and Engineering Expertise Required

Capturing depreciation benefits through cost segregation is a complex area of taxation, and there are many more nuances than we can explore in this blog post. For example, bonus depreciation is one of those tax “extenders” that has come in and out of the law throughout the last 15 years at different percentages, so CPAs must be careful to apply the correct percentages to the assets in question.
 
cost segregation Recognizing and taking advantage of depreciation benefits requires a special combination of both tax and engineering expertise. In fact, the IRS Cost Segregation Audit Technique Guide states:
 
The preparation of cost segregation studies requires knowledge of both the construction process and the tax law involving property classifications for depreciation purposes.
 
As you’re working on your clients’ extended 2014 tax returns, keep an eye out for the above opportunities to boost your their depreciation deductions through a cost segregation study. Feel free to contact us if you have questions about how to spot and take advantage of those opportunities.

Tags: cost segregation, Jennifer Birkemeier, Accelerating depreciation deductions, bonus depreciation

Don’t Overlook These 3 Client Transactions That Qualify for a Cost Segregation Study ... and Tax Savings!

Posted by Jennifer Birkemeier on 3/16/15 9:03 AM

If your client owns a group of commercial buildings that has a combined cost basis of $1 million or more, you may have some good news in store for them.

CostsegregationSo you’re sold on why tax time is the perfect time to talk about cost segregation opportunities with your client. Now you just have to spot those opportunities—and, of course, bring in the right cost segregation strategic partner to deliver those tax savings.
 
As you’re preparing your clients’ tax returns, look out for these three types of transactions that generally present an opportunity to accelerate depreciation deductions to the tune of at least 10 times the cost of the cost segregation study:
  • Purchase or construction of a building with a cost basis of $1 million or more. The cost-benefit calculation generally is most beneficial at the $1 million price point. However, in certain types of buildings with a high proportion of nonstructural components (such as hotels, restaurants, apartment buildings, retail establishments, and manufacturing facilities), a lower cost basis (such as $750,000) might also justify the cost of the study.
  • Multiple buildings of the same type that, all together, add up to a cost basis of $1 million or more. When one entity or individual conducts cost segregation studies on multiple buildings of the same type (e.g., 2-3 quick-service restaurants), as long as those buildings are within the same geographic market, the client will see efficiencies of scale in conducting cost segregation on that group of properties.
  • Tenant buildout with a cost basis of $500,000 or more. While new buildings tend to get all the attention, leasehold improvements are the unsung heroes of the cost segregation world. Because they are likely to involve fewer improvements to the building envelope or structural components, these construction projects likely are comprised of a higher percentage of Sec. 1245 property that qualifies for 5- and 7-year depreciation.
CSP360 Deep Dive Program If you missed these opportunities in prior years—don’t worry! Cost segregation can be conducted on properties that were placed in service as early as 1987. In fact, we recommend that CPAs automatically extend for all commercial property owners—not only to give them time to bring those owners into compliance with the Tangible Property Regulations, but also to perform cost segregation studies and other engineered services to minimize the tax bill.
 
Need help uncovering transactions that qualify for cost segregation? Contact us to schedule a Deep Dive into your commercial real estate client base to identify those tax-minimization opportunities.

Tags: cost segregation, Jennifer Birkemeier, Accelerating depreciation deductions, bonus depreciation

4 Reasons to Talk About Cost Segregation With Your Commercial Real Estate Clients NOW!

Posted by Jennifer Birkemeier on 3/11/15 9:05 AM

Tax season is the perfect time to talk to clients about lowering their tax bill by accelerating depreciation deductions.

taxslashingheroYou’re deep in the throes of preparing your commercial property owners’ tax returns, and your partners are clamoring for those clients’ Schedule K-1s so they can close the books on 2014. The last thing you’re thinking about right now is how to create more work for yourself.
 
That might be shortsighted. Now is the perfect time to identify and discuss with your clients how they can reduce their 2014 tax bill through accelerated depreciation deductions—especially since the actual work to segregate out the costs can be deferred until the extension deadline.
 
Why is now the ideal time to talk about cost segregation?
 
1. Position yourself as a tax-slashing hero.
 
With the Bush era tax cuts far behind us, your clients are likely facing a significant tax bill for 2014. As you are meeting with your clients to gather information or deliver their tax returns, you can offset the bad news of a looming tax bill with the good news that you uncovered ways to lower that bill. Consider this: The average cost segregation study delivers accelerated depreciation deductions that add up to at least 10 times the cost of that study. So take the time now to sniff out cost segregation opportunities.
 
2. Leverage your Tangible Property Regulations compliance work.
 
Another great reason to bring up cost segregation opportunities now: You’re already doing part of the work. The Tangible Property Regulations require you to analyze your clients’ costs for purposes of testing them as repairs vs. improvements. As long as you’re digging into that fixed asset schedule, why not look for opportunities to accelerate depreciation deductions on Sec. 1245 property?
 
Here’s a shortcut: If you find a high proportion of 39-, 27.5- and 15-year property on the client’s depreciation schedule, it might be time to consider a cost segregation study on that property.
 
3. Take advantage of bonus depreciation for 2014.
 
Congress’ last-minute bill retroactively extended, for 2014 only, the 50% bonus depreciation. Since that incentive applies to 5-, 7-year, or 15-year property, conducting a cost segregation to identify those shorter-lived assets could mean even greater opportunities for depreciation deductions, which may or may not be available in 2015 and beyond.
 
4. Get in front of commercial property owners’ purchase agreements.
 
CSP360 Deep Dive Program We’ve all had clients who closed on the acquisition of a commercial property without consulting us and were faced with unfavorable tax consequences. Here’s one of those consequences you’ll want to steer your clients away from: Thanks to Peco Foods, Inc. v. Commissioner, if the purchase agreement includes an allocation of purchase price, then the purchaser might be precluded from conducting a cost segregation. If you have an opportunity to get out in front of your clients’ acquisitions of property, we recommend bringing in a cost segregation strategic partner to advise the client on how to leave the door open for a cost segregation study.
 
If you have questions about any of these opportunities, we’d be happy to help. Contact us to schedule a consultation.

Tags: cost segregation, Jennifer Birkemeier, Accelerating depreciation deductions, bonus depreciation

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