Many commercial real estate owners and advisers think it’s risky to perform cost segregation because it’s a tax shelter that’s likely to cause an audit.
That’s a myth. The IRS published the Audit Techniques Guide, a 100-plus-page manual regarding the background and proper methodology for a cost segregation report. The IRS encourages a properly prepared cost segregation study because it generates more accurate accounting. Privately, IRS staff members have indicated that a cost segregation study does not increase the chance of an audit.
There are quite a few cost segregation myths floating around; I picked the five most common misconceptions and busted them in this infographic, free for you to download:
Jeff helps real estate owners increase their cash flow. He started his career as a Financial Analyst with the Irvine Company, and worked in various management/executive positions in the mortgage industry for many years. He's been a Cost Segregation consultant for several years and is considered one of the industry's top experts in TPRs. As Director of Business Development for Bedford Cost Segregation, Jeff helps his clients increase cash flow by accelerating their depreciation deductions, and by writing off assets that no longer need to be depreciated under recently changed tax rules. Jeff has a B.S. in Economics from Claremont McKenna College and an MBA with an emphasis in Finance from UC Berkeley.
Why CPAs Recommend Cost Segregation to Reduce Property Owner’s Income Taxes
How to Deduct 10% to 20% of Your Building’s Cost Against Your Taxes
How to Save Taxes by “De-Capitalizing” Your Building
Get a Big Tax Deduction When You Throw Out the Trash
How to Deduct $1.80 Per Square Foot When You Build or Retrofit a Building
Major Tax Benefits Apartment Owners Don’t Know About
Should You De-Capitalize Parts of Your Building?
New IRS Regulations Every Real Estate Investor Will Love