Real estate depreciation offers a substantial opportunity to increase tax deductions. Most depreciation schedules are established simply by separating the land and long-lasting improvements. This simple approach is legal but drastically underestimates legal depreciation. About 20-40% of enhancements for most properties are short-lived items. Short-lived items can be depreciated over 5, 7, or 15 years. There are about 130 short-lived articles that have been determined by legislation, tax court decisions, and IRS rulings.

Typically, real estate depreciation can be increased by 50-100% during the first 5-7 years of ownership by obtaining a cost segregation study. A cost segregation study accurately values ​​up to 130 real estate components that can be valued as short-lived property.

By obtaining a cost segregation study, it is possible to obtain a windfall of tax deductions “recovering” previously undervalued depreciation. This one-time “catch-up” can occur on the first tax return filed after the cost segregation study is done without filing any amended tax return.

Reviewing fixed asset (personal business property) listings can result in a significant amount of tax deductions. They often include items that should have been expensed, sold or thrown away, or have an excessively depreciated life. Items that should have been accounted for include operating expenses (sometimes included in error) and maintenance or repairs (which were necessary but did not increase the useful life of the assets or components). Section 179 allows businesses to use up to $ 108,000 of 2006 capital expenditures as tax deductions. Confirm that you are not capitalizing assets that could be claimed as a tax deduction.

Casualty losses also provide the opportunity for tax deductions. For a casualty loss, you can deduct: 1) the market value immediately before the loss minus 2) the market value immediately after the loss minus the amount covered by insurance. The part that is not intuitive is: the market value after the loss is much less than the value before plus the cost of renewal. Other factors that can and should be considered for tax deductions are: lost rent / use, stigma (in some cases), construction management, construction risks, and entrepreneurial effort.

Bad debts are a subjective matter. Judgment is required to accurately estimate the amount to be claimed as a tax deduction. If bad debts have not been closely scrutinized for several years, they can offer a significant tax deduction opportunity. (This applies to companies that use accrual accounting. Companies that use cash accounting cannot claim a bad debt tax deduction as they never recognized the income.)

Do good by doing good. Reduce taxes in several ways when making charitable contributions. For example, you bought a piece of land 10 years ago for $ 200,000 and now it is worth $ 1,000,000. However, he now realizes that he will never use the land for its intended purpose. You can donate the land to a qualified charity and get a $ 1,000,000 tax deduction. However, you don’t have to pay capital gains taxes on appreciation.

Tax deductions sometimes seem arcane and complicated. However, a team of advisers with knowledge of various fields can reduce your federal income taxes. The complexity of the tax code makes it difficult for anyone to know all the areas.

Cost segregation produces tax deductions and reduces federal income taxes nationwide and in markets of all sizes. Here are just a few examples of cities where cost segregation leads to significant tax deductions.

Town:

  • New York, NY
  • Houston, TX
  • Hartford, CT
  • Las Vegas, NV
  • Memphis, TN
  • Philadelphia, PA
  • Orlando, FL
  • Phoenix, AZ
  • Atlanta Georgia
  • Bridgeport, CT
  • Worcester, MA
  • Akron, OH
  • Harrisburg, PA
  • Salt Lake City, UT
  • St. Louis, MO
  • Portland, OR
  • Scranton, PA
  • Greenville, SC
  • Bakersfield, CA
  • Madison, WI
  • Chicago, IL
  • Fresno, CA
  • Riverside, CA
  • Albany, New York
  • Indianapolis, IN
  • Birmingham, AL
  • Ft. Lauderdale, FL
  • Baton Rouge, LA
  • Augusta, GA
  • Honolulu, hello

Cost segregation produces tax deductions for virtually all types of property, including the following:

Kind of property:

  • Medical Center
  • Mall
  • Restaurant
  • Country club
  • Fast food restaurant
  • Power center
  • hotel
  • Car wash facility
  • Convenience store
  • Health spa

Almost every industry, including the following, can generate profitable tax deductions through the use of cost segregation.

Industry:

  • Golf courses and country clubs
  • Manufacture of transport equipment
  • Manufacture of electrical components
  • Minor real estate
  • Clothing manufacturing
  • Manufacture of wood products
  • Manufacture of plastic and rubber products
  • Furniture stores
  • Manufacture of beverages and tobacco products.
  • Construction Supply Distributors

Tax reduction services include federal income taxes, state income taxes, and property taxes. We do not prepare income tax returns. Instead, our advisors review your circumstances and suggest profitable options to legally reduce your income tax liability. 5. O’Connor & Associates is a national provider of commercial real estate consulting services that include cost segregation studies, tax reduction, feasibility studies, tax return review, and apartment inspections. O’connor Associates services include business valuation tax deduction, due diligence, income tax, tax reduction, property tax, feasibility studies, real estate consulting, market research, Central Appraisal District of Denton, Tips and Tricks for Appealing Your Collin Property Taxes, Collin County Appraisal, Federal Tax Reduction

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