Before Covid, I was at a friend’s house for dinner, with a mouthful of lasagna and cheese still dripping from the fork, when my friend starts complaining about how the tax system benefits the rich, and how unfair it is to the middle class.
That is when I had to put my fork down, take a sip of my tea, and step in to correct him.
The fact is, anybody can benefit from tax system, if they know how to play the game. There is no secret the rich are hiding. The information is right out there in the open for anybody and everybody willing to figure out how to use it.
Luckily, you won’t have to dig through the tax code to find out about this tax “secret” that real estate investors use to pay little or no taxes on the income from their rental real estate. Let me share with you what I shared with him.
Do you own real estate? Do you pay too much in taxes? Then I want you to take a minute to learn about an often, overlooked opportunity to pay less taxes and have your money work more effectively for you.
Most real estate owners, or investors understand that we can depreciate our Real Estate asset over 39.5 years utilizing the Straight-Line method. However, there are other options. The one I would like to introduce you to is Cost Segregation.
Cost Segregation is a process of taking the building and breaking down the individual components of the building into four categories which are: (1) personal property, (2) land improvements (3) building and (4) land. The components that qualify as personal property and land improvements qualify for shorter useful lives under accelerated methods of depreciation. Tangible personal property generally falls under 5 & 7 year useful life, while land improvements are classified under 15 year property.
The Advantages of a Cost Segregation Study is that it can save you tens or hundreds of thousands of dollars in taxes today. What can that savings be used for? You know best and that is why I think your money should be in your hands and not the government’s.
By implementing a Cost Segregation strategy, the taxpayer reduces current federal taxable income by taking the maximum deduction permissible under the tax code. While the advantages can be significant, a Cost Segregation Study should only be prepared by an experienced qualified individual who issues a report to support the assumptions used in the classification of assets.
Is it worth it? YES… It is Worth the Effort! Here is why…
Cost Segregation is one of the most advantageous tax strategies available to property owners. Accelerating depreciation deductions leads to a lowering of taxable income and taxes due now and over the next few years. As a result, you increase your current cash flow and can reinvest the savings into your business or to grow your investments.
I always like it when my investments are growing. How about you?
Remember to consult with your CPA before undertaking a study or feel free to ask me who I’ve used in the past. I’m always happy to help or to speak with you about how this could work for you.
I am glad to help 800-582-1484.
Anna Petrossian is a former educator turned successful businesswoman with over 31 years’ experience in the world of manufacturing/import/consultancy and marketing.
She has focused her strengths on how to grow Companies and found creative solutions and resources others envied. Through her expertise and efforts, companies have grown into multi-million dollar ventures and she is often asked to assist other business owners on topics of where to get growth capital, reduce costs and improve profits. A valued resource to the business community, Anna prides herself first on helping others.