Hello all,
I strategizing my books for 2022. Who do you use (what organization) to do your cost segregation studies?
Thanks for your help,
Grit
We do it on our own with the advice of our CPA. There is not a particular organization that does this.
Grit,
While I see mPark advises that “there is not a particular organization that does this,” I believe you might have been inquiring about a company that does cost segregation studies. If that is the case then yes, there are numerous companies who will do a professional cost segregation study along with engineering reports and will back it up in case of an audit. There is one who stands out, in my opinion, and I would be happy to send you or anyone else his information if interested.
Of note: what you call rapid depreciation is about to lose a little of it’s power. From the time it was enacted until the end of 2022 you were able to take 100% of your accelerated depreciation in ONE YEAR. That meant if the study said that 50% of the value of your community was depreciable (such as roads, electrical, water, sewer infrastructure etc., you could depreciate ALL of that the first year. That was/is very powerful and is the way syndicators give a tax advantage to their Limited Partner investors. In some cases the majority if not ALL of the profits taken in the first year were offset by the depreciation taken making for a big tax break. The bad news is that this first year “bonus depreciation” is phasing out in each of the next years. In 2022 you could take 100%, in 2023 you can take 80%, in 2024 it’s 60% etc until it completely phases out.
As those who use this will also tell you, this is not free money. It is not a tax credit. Like all depreciation it can best be considered a loan from the IRS as it will eventually have to be paid back (although things like DST’s, 1031’s and stepped up basis can help with this).
DM me if you are interested in contacting the firm who is very well known and respected for this type of study.
Hope this helps (P.S. I do not get any renumeration for referring this company/person. I just think he is one of the best out there and enjoy sending business his way).
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