Choose Cost Segregation:
Improving the Economics of Commercial Real Estate
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Choose Cost Segregation Services, Inc. (CSSI©) and have experienced professionals working for you to improve cash flow through tax savings. As the Nation's premier engineering-based cost segregation firm, they are adding clients every day have completed over 27,000 studies since 2003 in all 50 states. CSSI©'s nationwide network of representatives bring the personal and professional attention that owners, investors, and users of commercial property need to ensure the study results meet tax laws and deliver maximium tax savings.
Focus
- Engineering-based Cost Segregation Studies
- Building Repair Regulations
- Capital to Expense Reversals
- Expense vs Capitalization Decisions
- Accelerated & Bonus Depreciation Benefits
- 263(a) Compliance
- Helping you keep MORE of your money
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Fred W. Clapp
Mid-Atlantic & National Accounts
If you're involved with commercial real estate, I can probably save you, and or your clients, thousands of tax dollars. I've represented CSSI© since 2012 and been fortunate to personally help over 400 building owners pay less in taxes.
If you own a building(s) with a basis between $250k and $5 million, or lease space with a build-out investment of $100k or more, our services can dramatically reduce your tax liability which will greatly increase your cash flow.
There is a high probability you're leaving a LOT of tax savings on the table.
Qualifications
If you answer YES to any of the following, let me provide a no-cost analysis of your building(s) that can predict your potential tax savings:
A. Do you pay taxes?B. Does your tax advisor use a straight-line depreciation schedule?C. Do you own or lease a building with a remaining depreciable basis, or lease a space that you made improvements to?D. Does your building or improvements have a cost basis of $100,000 or more?E. Will you own the building for at least three years?
A. Do you pay taxes?B. Does your tax advisor use a straight-line depreciation schedule?C. Do you own or lease a building with a remaining depreciable basis, or lease a space that you made improvements to?D. Does your building or improvements have a cost basis of $100,000 or more?E. Will you own the building for at least three years?
Never heard of cost segregation?
Cost segregation was first performend by major accounting firms with in-house departments that only worked on the largest properties at costs often exceeding $100k. Over time, most tax advisors came to believe a cost segregation study would be expensive, not a fit for their clients, and beyond their accounting expertise. Fortunately, CSSI© can deliver the same services at affordable fees meaning you can receive tax savings that once were only enjoyed by sophisticated CRE investors and owners of large properties.
Doesn't my tax advisor do this?
Every tax advisor calculates and applies depreciation on a tax return. As such, most CRE investors believe their tax advisor uses cost segregation when in reality, they apply the straigh line depreciaiton method. However, in order to properly apply accelerated depreciation, tax advisors should have expertise in commercial property construction, development, building asset valuation, and in-depth understanding of tax law specific to commercial real estate. Typically, only large accounting firms can perform those services andc will work with your tax advisor to deliver the same benefits at a fraction of their costs. Not sure...ask your tax advisor if they are using straight line depreciation and if they are, call Fred.
How do I use cost segregation with a straight line schedule?
An engineering-based cost segregation study allows you to apply an accelerated depreciation schedule. If your tax advisor utilizes a straight line depreciation schedule, a Change of Accouting Method Form 3115 will need to be flied. There is no need to amend any returns because that form is what The Treasury requires when you change the method of depreciation from straight line to accelerated. CSSI© typically completes the Form for your tax advisor's use.
Will an engineering-based cost segregation study trigger an audit?
A properly prepreared and documented engineering-based cost segregation study will not cause an audit. In fact, cost segregation is recommended in the US tax code as one of the best methods to accelerate depreciation of building costs. We follow the 13 guidelines listed in the tax code to prepare an engineering-based document with each study. However, should the IRS question our study, CSSI© will defend the results at no cost to our client or their tax advisor and we have never triggered an audit.
How much does this cost?
The best part about hiring CSSI© to perform your study is that all engineering fees for the site visit, consulting, document collection, 3115 form and study preparation are included. The cost is based on the type of building. For example, a warehouse with a small receiving office takes less time to complete than a multi-tenant office or apartment building would. The amount of time required for CSSI© to qualify, value, and document the building assets is therefore reflected in our fee. Each buidling is different and your no-cost analysis discloses the scope of work and engineering fee. Of course, as a business expense, it can be included as a write-off on your tax return. CSSI© typically delivers a hefty rate of return relative to the fee.
When should I perform a cost segregation study?
If you owe income tax and own commercial property, a study would be a fit. The timing to let CSSI© perform a study applys with existing buildings or new construction and can be performed on any property constructed, acquired, or remodeled since Jan. 1, 1986.
Does my property qualify?
Yes! If you have purchased, remodeled, or constructed any for-profit commercial or rental property since January 1, 1986. Also, you plan to hold the property for a few years. We often work with NNN build-outs starting at $50k and even buildings with a basis starting at $200k are excellent candidates.
What is an engineering-based cost segregation study?
An engineering-based cost segregation study is created by an independent firm with extensive construction and tax knowldge that can accurately qualify, value, and document building asset costs. The study "segregates" all of a building's components into tax code approved asset categories and assigns "costs" that allow them to be depreciated based on their class life instead of the building's class life. Each building's cost category has a different recovery period and method under the Modified Accelerated Cost Recovery System (MACRS).
Producing a tax code compliant study involves speciality expertise that most tax advisors do not possess. It's a building cost function instead of an accounting function and why thousands of tax professionals partner with CSSI©. When an engineering-based study is performed, actual cost records and construction documents are reviewed and a site visit is completed.
If those items are not available, our engineering-based cost segregation studies are performed by professional personnel with in-depth knowledge of construction methods, materials, and building components. Relying on the on-site visit inspection and walk-through, CSSI© performs a detailed analysis to accurately identify the building components and improvements that will be reclassified in order to take advantage of accelerated depreciation.
CSSI©'s professionals follow a methodical approach that meet the US Tax code guidelines in order to qualify your documents as an engineering-based study. According to the American Institute of Independant CPAs (AICPA), an engineering-based cost segregation study is like a gold standard record and the type documentation CSSI© wiil produce for you and your tax advisor.
Find out
No cost-analysis
Cost Segregation Services, Inc. (CSSI©) has performend thousands of studies on all type of buildings. Let us run some numbers for you. We compare your building with similar properties and provide a predictive analysis of the potential tax benefits. Included is the engineering fee to qualify, value, and document the savings for your tax advisor.
We partner
CSSI© does not prepare taxes but we are the calculation experts a tax advisor needs to determine how (or if) accelerated depreciation can benefit building owners. We deliver the documentation tax advisors need to utilize the savings. It's a win for your tax advisor and a bigger win for your bank account.
We deliver
CSSI© studies are completed in a timely manner and CSSI© has never missed a tax filing deadline. Each study meets the tax code requirements and CSSI©'s team is commited to delivering optimum savings.
How it works
The US tax code allows you to depreciate assets over what is described as their useful life. Commercial real estate (CRE) buildings do so over 39 years and apartment / rental property buildings over 27.5 years. Therefore, a taxpayer gets an annual depreciation expense write-off of 1/39th, or 1/27th respectively, of the building's cost. Technically, this is called straight-line depreciation because the same annual tax deduction is taken over a long time period. All of my clients were using a straight-line depreciation method until I made them aware of cost segregation.
Using cost segregation involves hiring CSSI© to apply our specialty expertise in qualifying and valuing building assets that have a shorter useful life than the building's useful life. Those assets can be depreciated under tax code approved time periods of 5 years, 7 years, and 15 years. Technically, this is called accelerated depreciation. When a taxpayer utilizes accelerated depreciation, they take deductions now instead of later.
As an expense, depreciation is applied against taxable income and if a taxpayer can increase their depreciation expenses, they pay less tax. If you are making money, taking tax deductions is the thing to do. Cost segregation is an important provision allowed in the tax-code and recommended by The Treasury.
CSSI© has done this successfully over 27,000 times in all 50 states for clients who own office buildings, rental properties, warehouses, self-storage and practically every kind of for profit commercial real estate property. CSSI© has never triggered an audit and will defend the results at no cost to you.
Using cost segregation involves hiring CSSI© to apply our specialty expertise in qualifying and valuing building assets that have a shorter useful life than the building's useful life. Those assets can be depreciated under tax code approved time periods of 5 years, 7 years, and 15 years. Technically, this is called accelerated depreciation. When a taxpayer utilizes accelerated depreciation, they take deductions now instead of later.
As an expense, depreciation is applied against taxable income and if a taxpayer can increase their depreciation expenses, they pay less tax. If you are making money, taking tax deductions is the thing to do. Cost segregation is an important provision allowed in the tax-code and recommended by The Treasury.
CSSI© has done this successfully over 27,000 times in all 50 states for clients who own office buildings, rental properties, warehouses, self-storage and practically every kind of for profit commercial real estate property. CSSI© has never triggered an audit and will defend the results at no cost to you.