Cost Segregation & Real Estate Investment Trusts

In general, commercial property can benefit from a cost segregation study. When you hear that it won’t work, it’s generally because the person saying it is uninformed or they know something unique about a case. As far as REITs go, here are a couple of points to consider:

• A REIT can significantly reduce overall taxable income and subsequently its distribution requirement, thereby retaining additional cash flow
• A CSS permits a REIT to pay dividends in the form of return of capital (untaxed until the shareholders shares are sold) instead of ordinary income. If the shareholder holds onto the shares for over 1 year, this will be taxed at the long term capital gains rate rather than the ordinary income rate.
• Investors typically prefer dividends with the greatest percentage of return of capital. 
• A CSS increases the return of capital component, thereby increasing the Taxable equivalent yield. 
• REITs are eligible to derive up to 15% of their total rental income from personal property that is leased under, or in connection with, the lease of real property. 
• Proper identification of property helps maximize the depreciation deduction resulting in increased cash flow.

For more information about Cost Segregation & to see your benefits in seconds, please visit www.PropertyTaxBenefits.com

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lgpotter33@gmail.com

The junior box, what is it?

 

We have all heard of big box stores like Wal-Mart, Target, and Home Depot.

A junior box is a type of big box store, just the smaller variety.  It is a retail space containing 20,000 to 40,000 square feet.  Common examples of junior box tenants are Hobby Lobby, Goodwill, and PetSmart.  Junior boxes actually make up the largest portion of overall net-leased big-box stores on the market.

Big boxes are larger than 80,000 square feet, while the mid box is a retail unit of 40,000 to 80,000 square feet.

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Two sites if you are a CPA, tax preparer, accountant or business owner in the USA.

1. For commercial property owners/clients:     www.PropertyTaxBenefits.com



2. For all businesses/clients: www.BusinessRefundEstimate.com



April 15th is fast approaching, see the tax savings in seconds!



Larry G. Potter

Specialized Tax Senior Advisor

Lgpotter33@gmail.com

Auto Dealerships Can See Tax Benefits from Renovation

Many automobile dealerships implement significant renovations as the industry morphs due to technology changes and as manufacturers rebrand. The goal of the renovations are, of course, to improve top line performance (sales).

Top line goals can effectively be achieved more quickly by capitalizing on the tax benefits associated with the renovations; for instance, it’s not uncommon for $1MM in renovations to conservatively equate to a $60,000 tax related improvement in the bottom line. Given a 10% profit margin, that equates to a $600,000 increase in top line results.

What Tax Benefits?

Tax benefits associated with construction costs can be procured through an Engineering Based Cost Segregation Study. This Study applies tax compliant depreciation time-lines to certain non-structural components.

Furthermore, the tax benefits of properly depreciating current renovations can apply to the entire existing facility, including past renovations.

Cost segregation analysis is a logical tax strategy dating back to 1959 when the Tax Court first allowed component-based depreciation of buildings (though greatly clarified over the past decade with the IRS’s Audit And Technique Guidelines). Even properties purchased years ago can capture benefit with a very attractive cost-to-benefit ratio for performing an Engineering Based Cost Segregation Study. Any auto dealership whether purchased, constructed or renovated for costs in excess of $500,000 should consider this service.

www.BusinessRefundEstimate.com

Non-Profits vs Deductions

If you are a non-profit with many credit card transactions, you should know that many non-profits may be on special pricing tiers due to their non profit status. 

This means that you have the potential to have your Credit Card rates on special pricing, your Waste & Recycling may be on special layout, etc. 

We can only determine this via Discovery Call 

www.BusinessRefundEstimate.com

And if you own commercial property, you can see your saving in seconds: See your savings in seconds at  www.PropertyTaxBenefits.com

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