Tax Advantaged

Cost segregation. Bonus Depreciation.

These two federal programs mean significant tax advantages. More of your earned dollar stays your dollar, not the taxman’s. If you’re a passive investor it can potentially eliminate your taxes on your investment, and if you’re a Real Estate professional, it can offset active income! The advantages are unique to every individual, so ask questions and consult your CPA.

Cost segregation is a program that allows for the separation

Personal Property from Real Property and Land Improvements. What this really does is change the time frame of depreciation on the property. That change in depreciation schedules allows for accelerated paper losses to the investors. Those paper losses are then applied to the income the investor earns in the asset. This has a marked impact on the taxable liability of your balance sheet.

Importantly, we can’t forecast the impact for every investor so we factor ZERO depreciation benefit into an investor’s pro forma returns!

Some of our investors have had huge impacts.

For example, a person invests $100K in a project.  Our pro forma forecasts a 100% return of capital (not taxable) plus 100% return over 5 years(taxable).  Our cost segregation study allocates a $50K depreciation to their pro-rata share of the project. In simple math, that means instead of paying tax on $100K in gains, their tax burden is on $50K in gains.  Depending on the individual’s tax situation this can be a major tax deferral strategy!  And, if you are a Real Estate professional, your situation is very different.  Real Estate investments are Active Income for Real Estate professionals, thus you can offset ordinary income!  We are illustrating examples only and not providing tax advice.  Please seek professional advice.

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