TANGIBLE PROPERTY REGULATION EXPERTS
To learn more about cost segregation:
Cost Segregation is an approved application in the tax code by which commercial property owners can accelerate depreciation and reduce the amount of taxes owed. This savings generates cash flow that owners often use to reinvest in the business, purchase more property, apply to their principle payment or spend on themselves. We find positive ROI in this real estate Cost Segregation for buildings valued at $250K and above.
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In late 2013, the government issued final regulations providing rules regarding the treatment of expenditures for acquiring, maintaining, or improving tangible property. In 2014, the IRS issued final regulations on the treatment of and dispositions of tangible property. Under the Tangible Property Regulations; aka. Repair Regulations, a taxpayer must generally capitalize amounts paid to acquire, produce, or improve tangible property, but they can expense items with a small dollar cost or short useful life.
The Repair Regulations also contain specific rules for determining whether or not an expenditure qualifies as an improvement. They provide Safe Harbors for amounts paid for routine maintenance of property. The Regulations provide insight for an election to capitalize certain otherwise deductible expenses for tax purposes if they are capitalized for book purposes.
The final disposition regulations allow taxpayers to make a partial-disposition election for certain dispositions of a portion of an asset. In other words, the taxpayer could potentially receive a tax savings from what was disposed of (thrown in the dumpster) in a betterment, adaptation, or renovation of the property.
It's simple, legal and recommended in the August, 2004 issue of the Journal of Accountancy for CPA's. The article stated, "A taxpayer can substancially increase cash flow by segregating property costs."