A tax benefit for commercial property owners established by the Internal Revenue Code, Sections 1245 and 1250. It allows owners of commercial property or leasehold improvements to reclassify certain assets that are usually depreciated over 39 years (commercial real property) or 27.5 (commercial residential) into "tangible personal property" that is depreciated over 5 or 7 years or into “land improvements” which are depreciated over 15 years. Additional depreciation can translate into immediate cash savings.
Anyone who owns commercial or income property worth $1 million or leasehold improvements of $500,000 should realize significant benefits from this program.
How does it work?
Our engineers and tax specialists perform a detailed review of your building, including special purpose mechanical, electrical and plumbing fixtures, decorative finishes, and site improvements, and, for new construction, blueprints, AIA documents, and change orders. We can reclassify up to 45% of a building’s cost into new asset categories with accelerated depreciation schedules. Our tax specialists then work with your accountants to complete and file Form 3115 using our study and calculations. No amended tax returns are required.
What is bonus depreciation?
Personal assets, including those uncovered and reallocated as part of a cost segregation study, which were put in service in 2011 and 2012 qualify for bonus depreciation. For 2011, 100% of the value of the asset can be depreciated in the first year and in 2012, 50% of the value can be depreciated in the first year.
How much can I save?
Tax benefits realized average $60,000 for every $1 million in construction cost or purchase price.
How much does it cost?
We charge a very competitive fixed fee based on the size and scope of each project. Our fees are capped at 10% of the savings.
Why haven’t my tax advisers recommended this strategy?
Your accountant has already segregated some of the assets in your building into personal property. Our structural engineers and tax professionals compare your building with our database of similar buildings to identify additional assets which qualify for accelerated depreciation in 80% of the buildings we review. Our “engineering actual” approach is fully sanctioned by the IRS.
How do I get started?
We review your depreciation schedules and perform a free feasibility report to determine the cash flow and net present value of the benefits. We then consult with your CPA to evaluate your current tax status and future business plans to verify the benefit for your situation.
Who you hire can make all the difference.
We combine both the tax and engineering expertise necessary to identify tax benefits on commercial property. We have performed thousands of studies with zero disallowances by the IRS. Our fee includes free, unlimited audit defense should the IRS question the results of our study.
To Request Information, Contact Us or call us at 800-598-5587.
Your analysis of my investment in real estate allowed me to depreciate nearly 45% of the value of my Dealership’s property in half the time I had planned to. As a result, my accountant was able to recoup over $60,000 in taxes paid over the past three years and the reclassification will continue to deliver savings for several years to come. -Owner