news

"The Best of Both Worlds"
AICPA Journal of Accountancy, August 2005
By Mary Foster and William B. Allen III
"Combining Cost Segregation and Section 1031 exchanges allows
taxpayers to defer the maximum amount of income taxes."

“Why Do I Need Cost Segregation?”
By Scott Zarret, CPA
Denver Business Journal in April, 2004
"Industry-leading real estate professionals across the nation are
aware the cost-segregation industry is in a time of explosive growth.
Recently, cost segregation has become one of the most valuable tax-
deferral strategies to take the mainstream commercial real estate
community by storm."

"Cost Segregation Applied"
AICPA Journal of Accountancy, August 2004
By Jay A. Soled & Charles E. Falk
"When it comes to real estate acquisitions, the jewel of cost
segregation is that it yields enhanced depreciation deductions. There
can be astounding differences in outcomes between using and not
using it."

"Cost Segregation Saves Money"
Denver Business Journal, August 20-26, 2004
By Erin Johansen
"A tax-deferral strategy that's gaining popularity is saving some
building owners hundreds of thousands of dollars."

"Money Doesn't Grow on Trees"
AICPA Journal of Accountancy, July/August 2005
By William J. Barnes and Ralph Consola
"What would you say if someone offered you a dollar in
exchange for a dime? To skeptics, that would sound too good
to be true. "

"The Interaction of Cost Segregation, Code Sec. 1031
Exchanges and Depreciation Recapture"
Journal of Pass-through Entities, CCH Incorporated,
January-February 2004
By Mary E. Foster and Martin E. Virdick
"Many issues arise with the interaction of like-kind
exchanges and the depreciation recapture rules of Code
Sections 1245 and 1250. These issues will become
increasingly important to taxpayers and their advisors as
cost segregation studies become more prevalent and the
properties that have been cost segregated are subsequently
disposed of in like-kind exchanges."

"Partnering with Specialized Services Firms Can Attract
New Clients and Income Streams to Your CPA Practice"
Journal of Tax Practice Management, Vol. 2, No. 4, July-
August 2003
By James E. Carroll, Kristina Wagner, Scott T. Meredith,
and Tim Moncher

"Cost segregation is an excellent service to offer your clients
who own commercial property, and can easily be offered by
partnering with an outside specialist. Providing specialized
leading-edge services like this to your client base will
reaffirm the trust and personal relationship that exists
between you and your clients, and serves as an excellent tool
to attract new business to your practice."

Commercial Real-Estate Cycle
Peaks and Will Pull Back in 2007
By Ryan Chittum
From The Wall Street Journal Online, October 2006

The commercial real-estate cycle appears to have reached its
peak and will begin pulling back in 2007, according to a new
survey of industry executives.

REQUEST A FREE PROPERTY ANALYSIS

Who Should Perform a Cost
Segregation Study?

In Chapter 4 of the IRS Cost
Segregation Audit Techniques
Guide, the first element of a
“quality cost segregation
study” is “preparation by an
individual with expertise and
experience.” The Audit
Techniques Guide goes on to
say: “Preparation of cost
segregation studies requires
knowledge of both the
construction process and the
tax law involving property
classifications for depreciation
purposes. In general, a study
by a construction engineer is
more reliable than one
conducted by someone with no
engineering or construction
background. Experience in cost
estimating and allocation, as
well as knowledge of the
applicable law, are other
important criteria.”

WHAT IS COST SEGREGATION?

Cost Segregation is an IRS defined
and sanctioned approach that
requires skills and expertise in
Construction Engineering and
Taxes.

The process allows Commercial
Property owners to REDUCE
FEDERAL TAXES by accelerating
the depreciation on their properties
by separating real (essential) and
personal (non-essential)
components of building cost and
reclassifying the depreciation on
the personal items from 39 years to
5, 7, and 15 years.

Accelerated depreciation...
Reduced Taxable Income...
Increased Operating Cash Flow

Providing benefits that are
potentially TENS or even
HUNDREDS OF THOUSANDS OF
DOLLARS.

With current IRS rules, the owners
can take advantage of these
benefits immediately by filing a
single form (Form 3115), which
does NOT require restatement or
amending tax returns.

Cost segregation is the most
accurate and effective way to
depreciate improved real
estate acquired or built after
1986. When using this
approach for federal tax
reporting, the depreciation of
certain property
improvements and
components may be reflected
in shorter-life recovery
periods. Depreciation is the
primary non-cash tax
deduction. Net income is
significantly affected when
selected improvements are
depreciated over 5, 7 or 15
years, rather than 39 years
for commercial property and
27.5 years for apartments.
Reducing the depreciation life
for components increases
annual depreciation, and
affects reduction in federal
income taxes.