HOW TO I KNOW IF A COST SEGREGATION WILL BENEFIT ME?

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One of our Tax Experts will review your property and tax structure during a Preliminary Analysis to see how much a cost segregation study will benefit you before a study is performed. This Preliminary Analysis is 100% free and can be completed in a short a amount of time.

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HOW IS A COST SEGREGATION PERFORMED?

 

After a Preliminary Analysis, we will inspect the property and request the required information from you. Once we have all the information needed, our Team will conduct the Cost Segregation Study and issue a 30+ page detailed report. This report will then be given to your CPA or Accountant during the preparation of your tax return?

 

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CAN I GET A REFUND?

 

Yes! Our clients get refunds in many cases. The results will be implemented on your tax return. This is going to many depend on your taxable income before the cost segregation results are implemented, entity structuring, taxes paid in, etc. We will be able to measure the tax benefits, however refund amounts are calculated when your CPA or Accountant prepares your tax return.

 

 

 

I’VE ALREADY FILED MY TAX RETURN – DO I HAVE TO AMEND?

 

An amendment is no longer required to fix depreciation in the prior years. The IRS allows taxpayers to file FORM 3115: Change in Accounting Method – this form allows the taxpayer to take any missed depreciation deductions in the current year.

 

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WILL DEPRECIATION BE RECAPTURED IF I SALE THE PROPERTY?

 

If you sell the property in a taxable transaction, you may have to recapture your accelerated deductions taken from using cost segregation. However, a cost segregation is often used in conjunction with a 1031 exchange. If you decide to use a 1031 exchange, the accelerated depreciation will not be recaptured until you sell the replacement property. These strategies are often used together to push back capital gains taxes to the replacement property.

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WHAT IF I GET AUDITED?

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Our cost segregation report will be used to defend the audit. Our reports are the most detailed in industry and the methods we use are in conformity with IRS methods or often exceed basic requirements for a study.

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HOW LONG WILL IT TAKE TO COMPLETE THE STUDY?

 

Residential properties can take anywhere from 5 to 30 days once all information is received. Commercial properties are expected to take 10-60 days.

 

 

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HOW MUCH DOES A COST SEGREGATION STUDY COST?

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The benefits of a Cost Segregation Study are expected to substantially outweigh the cost of performing the study. Fees for a cost segregation on a long-term rental may be as low as $2,000 per unit, while fees for vacation rentals are typically $3,500 to $6,500. Commercial properties, apartment complexes, multi-family, farms, and others typically range from $4,500 to $25,000.

 

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DOES ASC HAVE TAX EXPERTS TO HELP IF MY CPA HAS QUESTIONS?

 

Yes! We often work directly with your CPA or Accountant when implementing the results of the Study on your tax return.

 

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MY ACCOUNTANT SAID I WOULDN’T BENEFIT FROM A COST SEGREGATION. WHAT CAN WE DO?

 

Accelerated Depreciation from a Cost Segregation almost always makes sense for investors who meet 2 requirements:

 

a)Property Cost Basis is greater than $300,000.

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b)The Property must be used for Business or Rental, and needs to be purchased or remodeled within the last few years.

 

However, in many circumstances, Investors may be limited on how much passive real estate losses they may be able to deduct in a single year, with excess losses being carried forward into future years. In these circumstances, we have Real Estate Tax Experts that offer entity restructuring and operational restructuring services to help investors legally bypass this single-year loss limitation.