Month: October 2023

Mastering the Art of Expensing and Accelerating Depreciation Webinar

October 11, 2023 / John Murphy

We have an upcoming free course for CPAs to earn continuing education credit (1.5 hours of CPE) but this will also be a helpful webinar for commercial real estate brokers, commercial bankers and of course, building owners. Commercial building owners should know this information. If you are a residential real estate investor or owner of short-term rentals, this will also be a helpful course.

Prepare for a comprehensive exploration of the intricate world of cost segregation and gain valuable insights to demystify the application of Tangible Property Regulations, resulting in significant reductions in your client’s taxable income. Unlock the artistry behind these regulations to maximize their advantages. We will dissect the most prevalent depreciation and expensing opportunities for clients who own and develop commercial real estate and short-term rentals. Whether it’s Commercial Buildings, Apartment Complexes, Long-Term or Short-Term Rentals, Disposition of Materials, or Interior Renovations, each presents unique opportunities for expensing and accelerating depreciation, provided you have a foundational grasp of the regulations and access to the requisite cost data.

Rather than drowning in the complexities of regulations as is often the case in presentations, we will utilize real-world scenarios encountered by building and short-term rental owners to assist you in crafting a strategy for expensing and accelerating depreciation, including leveraging Bonus Depreciation. An integral aspect of our sessions is addressing your specific queries to empower you in confidently applying these regulations to meet your client’s precise requirements. Hundreds of Tax Professionals have consistently rated CSSI’s team of presenters and content as excellent. We cordially invite you to join us for an engaging 1.5-hour discussion filled with strategic insights and ample time for addressing your inquiries. CPE credits are available for CPAs through our NASBA certified provider.

LEARNING OBJECTIVES

By the end of this lesson, attendees will be able to discuss advanced depreciation and expensing strategies related to cost segregation including:

•Common scenarios for expensing and accelerating depreciation using the Tangible Property Regulations and Cost Segregation

•Advantages of Short-Term Rentals

•When to use Bonus Depreciation vs Section 179

•Renovation Depreciation — When to use Partial Asset Disposition (PAD) and Qualified Improvement Property (QIP)

•Grouping OpportunitiesYour clients who own buildings may be eligible for substantial deductions. Grasp the implications in these real-life scenarios to deepen your understanding of strategies and gain a competitive edge, ultimately affording your clients the deductions and cash flow they rightly deserve.

REGISTRATION INSTRUCTIONS

•You must register for and attend the entire session to receive CPE credit.

•A course evaluation must be completed to receive CPE credit.

•Group attendance will not be recognized. Each attendee must be logged in individually to receive credit.

When you register, you can put my name down as the rep who invited you.

Cost Segregation Explained for Mobile Home Parks and RV Parks

October 10, 2023 / John Murphy

Cost Segregation Explained for Mobile Home and RV Park owners in 2 minutes. These are great assets for cash flow and the depreciation these parks generates is second only to C-stores and tunnel car washes. It’s not uncommon to see 50-90% of the property get reclassified so it can be accelerated.

What does this mean? Let’s say you purchased an RV Park for $2.5MM and the land is worth $500,000. That leaves you with a cost of $2MM which as it sits is 27.5 year property. But what if you could reclassify 75% of it by doing cost segregation? That’s $1.5MM in property that has been reclassified as either 5 or 15 year property. In 2023 you can take 80% bonus depreciation. So the owner could get a depreciation expense of $1.2MM in year one of owning the property. If he/she took straightline 27.5 year deprecation without cost segregation, the depreciation expense would be a maximum of about $72,000 that first year depending upon when they put it into service.

Remember that cost segregation is based upon cost and not appraised value. If you have a property that you paid $200,000 for 20 years ago and now it’s worth $1.5MM, a study isn’t going to help you much unless you’ve done a ton of improvements along the way. What we are seeing is a number of these parks are either being developed or they are trading hands. Once that happens, the new owners should definitely look at doing cost segregation.

I work all over the U.S. in all 50 states and get calls from all over the place to help with cost segregation not only on these assets but all types of commercial property. I’d be happy to talk with you at no charge and if you’d like our team to run the numbers for you, just let me know. Connect with me on LinkedIn or Twitter.

Tesla’s Electrifying Transformation: Diner, Drive-In Theater, and Charging Station to Replace Shakey’s Pizza Parlor on Santa Monica Boulevard

October 9, 2023 / John Murphy

Tesla to build a very cool diner and drive-in theater charging station in West Hollywood. Check out Tesla’s new diner proposed for Santa Monica Blvd, Los Angeles, CA.

BizNow has a details on it as well. It’s a great concept and one that I think other developers could mimic. When do we start to see these in Charlotte, Raleigh-Durham, Atlanta and Nashville?

The South Carolina Success Story: Advanced Manufacturing’s Rise in the Palmetto State

October 9, 2023 / John Murphy

This is a remarkable article about the growth and success of South Carolina as a business powerhouse in the southeast. There has been a lot written about South Carolina and its transition from textiles to advanced manufacturing but this is the most comprehensive piece I have found on the subject.

South Carolina continues to garner attention on the global stage. BMW and Michelin certainly have had a massive impact on that. They are in the Upstate of South Carolina. Boeing in Charleston now also plays that key anchor role in the other part of the state.

There are so many assets here in South Carolina. From a business perspective, it’s a very friendly business climate that starts at the state level. Most counties are friendly as well. The Port of Charleston is a huge driver of commercial success as well as the Inland Port Greer which allows ships to unload in Charleston and run the boxes on rail right to the Upstate where it can then be readily trucked all up and down the east coast.

The quality of life is also quite good across the state. Worldclass beaches and resorts run all along the eastern seaboard of the state from Myrtle Beach down to Charleston and Hilton Head. The Blue Ridge Mountains can be seen and visited through the Upstate just north of Greenville, SC about 45 minutes to an hour.

The cost of living is generally cheaper here in SC than you’ll find in most parts of the country. Property taxes in particular are some of the lowest you’ll find anywhere.

Benefits of Cost Segregation for Flex Buildings in Spartanburg, SC

October 7, 2023 / John Murphy

New Flex Industrial Space – Spartanburg, SC

Nearly every week I’ll get asked the question if a particular building would be worth studying. My comment is generally they are all worth studying. Would it be worth it if the fee were $15-$20k? No. But under $5k for a lot of these buildings…all day long. What if you could accelerate or depreciate 10-20% of your building’s cost in the first year? (Each building will vary).

Here’s a brand new development by Jordan Skellie, CCIM with Lee and Associates in Greenville, SC. This is an excellent brand new flex building located in Spartanburg, SC. These kinds of small industrial spaces are in high demand. In other parts of the country they might call these Contractor Garages. This building is within about 3 minutes of entering and exiting the all important I-85 that runs between Atlanta and Charlotte and goes right through Greenville and Spartanburg in the Upstate of South Carolina.

Jordan still has some some available as he just got the Certificate of Occupancy. Reach out to Jordan Skellie if you’re interested in the space.