Present-Value Savings

Each $100,000 in assets reclassified from a 39-year recovery period to a five-year recovery period results in approximately $16,000 in net-present-value savings, assuming a 5% discount rate and a 35% marginal tax rate.

CPAs play a central role in the cost segregation process. They are the most likely people, in addition to a good broker, to recommend use of the technique to their clients or employers. CPAs also will review and implement the findings in the required engineering report. This article will guide CPAs through the process by discussing how cost segregation operates, providing a comprehensive example of the technique in a real estate acquisition and outlining its advantages and disadvantages.

Stay tuned for the continuation next week.  Thanks!

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

One Response to “Cost Segregation – A Tax Savings Tool – 3”

1. Todd Strumpfer says:

   November 8, 2009 at 3:22 pm

   Cost Segregation is an IRS-approved method to increase your deductions for depreciation which reduces your taxes. This will reduce your taxes by approx. $35,000 for every $500 K you have in building costs (or purchase price). This is for existing property or new construction. This is something that most CPAs know about but don’t do for their clients because they don’t have the engineers and expertise on staff to do it. We can do a free analysis so you will see the financial benefit in your situation. Contact us at 888-303-4874 or todd.strumpfer@costsegserve.com

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