Dear GP Client:

is the magic sauce that breaks your real property into its components and some of these components can depreciate much faster than the typical overall standard 27.5 or 39 year periods. This magic sauce is brought you courtesy of a team of engineers that specialize in studies that are accepted by the IRS as a method a tax reduction.

When you buy real property, you typically break it into two assets for purposes:

  • land, which is non-depreciable; and
  • building (residential is 27.5-year property; nonresidential is 39-year property).

With a cost segregation study, you make your property much more than a building on the land. Here’s what’s possible with a cost segregation study:

  • land, which is non-depreciable
  • 5-year property
  • 7-year property
  • 15-year property
  • for the remainder, 27.5-year property or 39-year property, depending on building use

With a cost segregation study, you front-load (“It’s my money and I want it NOW!!!“) your deductions and take them sooner, but you’ll take the same total amount over the lifetime of the property.

Tax reform under the Tax Cuts and Jobs Act boosted bonus from 50 percent to 100 percent, and this new law also allows bonus on qualifying used property. Cost segregation is made to take advantage of these new law changes. And you can apply cost segregation to rentals and offices you have had for 10 years or that you are buying tomorrow.

If the passive activity loss rules affect your ability to take immediate rental losses, we need to run the numbers to see if you can benefit and also identify what you could do to benefit even more.  

Tax reform in one of its “not beneficial to you” new law sections took away your ability to do a like-kind exchange for non-real property. Therefore, if you do a cost segregation and then later use a like-kind exchange on that property, you’ll have taxable gain attributable to everything that’s not land or 27.5-year or 39-year property.

We recently saw a cost study on a new $400,000 property purchased this year. The study enabled a speed-up of $50,000 of deductions to this year’s tax return. For this taxpayer, who was in a combined federal and state income tax bracket of 40 percent, this put $20,000 in their pocket this year.

Let’s get started with you your real estate empire. Email or call GP today.

MORE ARTICLES FROM OUR BLOG

What the Section 199A is about in new Tax Cuts and Jobs Act tax reform

Dear Landlords & Real Estate Titans: The reform added new tax code , which created a 20 percent possibility for you if your rental property (a) has profits and (b) can qualify as a trade or business. As the law...

Test your knowledge about NC Sales Tax for HVAC Services

If your business involves repairs, maintenance, or installation services related to vehicles then this quiz will test your knowledge of current law. MORE ARTICLES FROM OUR BLOG

Home office deduction – walkthrough by GP CPA

Dear Client, The home office deduction is rather limited for your tax situation (and most people other taxpayers), especially in the trade-off between S-corp and schedule C.  The Schedule C offers better home office deductions, but the overall tax bill is...

Payroll with GUSTO!

is often a thankless task for business owners. Whether your is hourly, salary, organized, or chaos, it is still a time consuming endeavor. There are federal laws, state laws, local ordinances, and regular changes at every level. Specialized industries...

Tax Cuts & Jobs Act Nov Update

Tax Cuts & Jobs Act Nov UpdateNovember 2018IRS Says TCJA Allows Client and Prospect Business Meal Deductions In Notice 2018-76, the IRS states that client and prospect business meals continue as tax deductions under the Tax Cuts and Jobs Act. This is very good...
Tina Simmons
Tina Simmons
13:38 17 May 19
This team is dedicated to their clients and committed to understanding your business and sharing their knowledge to help you succeed. I love working with these folks, they take the worry and uncertainty out of and taxes!read more
Bravo4 Autowerks
Bravo4 Autowerks
12:55 08 May 19
Gary and his team have been fantastic for me and my business. They respond well to all my questions, are very helpful and of course keep my financials in order. Highly recommended.read more
Queen City Newborn Care
Queen City Newborn Care
15:57 02 Apr 19
I was drowning before I met Justin. He totally transformed how I run my small business and has gotten me organized in ways I didn't even know were possible. I am so grateful for his advice and suggestions! This company is worth every penny.read more
Dennis Bloomberg
Dennis Bloomberg
16:01 26 Mar 19
Unfortunately, I found GMP when my mother passed. She had a trust set up and I had no experience with one. I received excellent advice prior to filing taxes, that allow for the transfer of assets with little tax implication. The tax process was simple for me, Justin took over once he had details and cleared up all question from filing our taxes. Thank you for a job well done!read more
Natalie Knight
Natalie Knight
15:35 21 Nov 18
Prusiensky is up to date on technology. They handcraft a platform that works best for your company's services. We really appreciate how hands on and quick their team is when replaying to any type of correspondence. Simply put, they care and want your company to succeed.read more
Ashlyn Lelej
Ashlyn Lelej
14:39 21 Nov 18
I highly recommend Justin at Prusiensky, CPA for all of your and tax needs. I've been a client for over two years, and have been consistently impressed with their dedication to helping my business grow and be financially successful. His advice is invaluable. Thank you!read more
Bobby Nguyen
Bobby Nguyen
22:23 20 Nov 18
My partner and I started our very first small business last year. Justin has been a blessing to us. Being new at all of this, we didn’t understand much of how business taxes work. Justin explained and answer all of questions that we have. He took care of everything for us throughout the year and have made life so much easier for us. I couldn’t have asked for a better CPA. Highly recommended!read more
Next Reviews

CATEGORIES

[Frequently Asked Questions] CFP (Certified Tax Planner)
Tax Cuts & Jobs Act Nov Update