Cost Seg Building

A Blog About Tax Savings for Building Owners

Month: November 2022

Commercial Brokers, Realtors and Insurance Brokers Should Use Cost Segregation to Grow their Business

November 29, 2022 /

My experience is that 8 out of 10 building owners aren’t aware of this incredible tax application that boosts their cash flow and lowers their taxes… commercial brokers, insurance brokers, tax and financial profressionals and property managers are all trying to reach buildling owners and yet few if any are having conversations about cost segregation. You don’t need to be an expert. Just ask if they’ve done it yet to their building. It’s a missed opportunity all the way around.

If you don’t ask, you’re missing out on potentially really helping a client. In some cases you might gain a new client because of it. Maybe you end up writing another policy or pick up more money to invest from them. Or maybe with the extra money they save they end up buying another building with you…or you pick up a new tax client. Plus you can get paid a referral if you join our referral program. It’s easy and costs you nothing. Contact me to join our program and let’s keep business and building owners in business and profitable! Note: financial services cannot be paid a referral due to regulations. However, let’s say you help someone save $50-$100k on their taxes…perhaps they will reinvest some of that tax savings with you buying financial / life insurance products.

Tenant Improvements – Should They Be Capitalized or Expensed?

November 29, 2022 /
Photo: John Murphy, Cost Seg Building

Dumpsters will often catch my attention 🙂 I wonder how many building owners who are paying for TI’s / Upfits in a building like this capitalize the improvements rather than expensing them? I don’t know anything in particular about this specific building. I don’t know what the upfit costs will be but it was stripped to the studs. Let’s say it’s $50-$75k to renovate this space? Would you capitalize it? Expense it? Let’s assume the owner has had this building in-service for at least one tax year. Since this is one of 4 units in this building, we would think expensing those improvements utlizing the Tangible Property Regulations would be the way to go.

If you happen to have a building where you think you may have capitalize improvements / TIs where perhaps they could have been expensed, feel free to reach out. We can help you figure that out at no cost. If it turns out you can and should do a capitalization to expense reversal you might be able to do it on your own…if you need our help, I would get you an estimate. BTW, these typically are absolutely monster tax savings or the owner 🙂

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Kansas City Based NorthPoint Development Plans Massive Industrial Park in Spartanburg, SC

November 29, 2022 /
Photo: NorthPoint Development / Upstate Business Journal

Money continues to flow into the Upstate of South Carolina as more companies and developers realize the value of having facilities here.

NorthPoint Development recently purchased 310 acres and plans to build a large industrial park in Spartanburg County called Spartan Enterprise Park.

More information about their development can be found in the Upstate Business Journal article. The developer is quoted, “NorthPoint Development is excited about the opportunity to bring our expertise to one of the fastest growing industrial markets in the country,” said NorthPoint Development Director of Industrial Leasing Nathan Brinker. “We have identified the Upstate as a prime market for investment due to its central location in the Southeast offering access to a large percentage of the population, connectivity to major regional transportation corridors and efficient delivery of goods via the state’s expanding inland and seaport network. Our assessments of this market show a rapidly growing population and corresponding favorable labor dynamics which companies look to when making expansion or relocation decisions. We look forward to working with local and regional economic development entities as well as the Colliers team to find the right tenants and bring new corporate investment to the Upstate.”

Dentists Can Save $100,000 On Taxes By Using Cost Segregation

November 8, 2022 /
Photo Credit: John Murphy

Dental buildings have really come a long way. We are seeing more and more of them with beautiful design and finishing. Many now cost between $1.5 – $2.0 million. That’s a big expense for anyone and especially for dentists who may well be continuing to pay for dental school loans.

If the ownership of the operating business and the LLC that owns the dental building are the same, the dentist can group these entities the first year they put the building into service. That allows the operating LLC to take advantage of the depreciation generated by the real estate LLC. The tax savings can be significant.

Many of these buildings will see 20-30% of the building cost or basis able to be depreciated in the first year. For buildings placed into service starting in 2023, the bonus depreciation drops from 100% to 80% so please note that.

Recently we saved this dentist well over $100,000 on their income taxes when we did an engineering-based cost segregation study for them.

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