Introduction

If you are a property owner in Santa Fe, then you should know about tax deductions that can be taken by means of a cost segregation study. This kind of study is one that can provide significant tax savings on commercial and residential investment properties across the region. By properly categorizing building components and identifying shorter depreciation schedules, property owners can reduce their tax burden and improve cash flow substantially in the first year of ownership or improvement.

Understanding the Cost Segregation Process

Cost segregation requires a specific type of study that usually involves an engineer to examine a commercial property’s components. Instead of writing off a property over 39 years for commercial and 27.5 years for residential rental purposes, the cost segregation study identifies portions of a property that can be written off over 5, 7 or 15 years. It breaks down items, such as light fixtures, flooring and wall covering, and more.

Advantages for Property Owners

Those Santa Fe property buyers that use cost segregation studies often realize large monetary benefits.

• Immediate tax benefits by means of the accelerated depreciation deductions
• Better cash flow due to lower tax obligations.
• Improved ROI on property buying
• Retroactive benefits for properties acquired in prior years
• More money on hand for property upgrades or to invest in other areas.
• Professional documents that substantiate your tax choices in the event of an audit

Who Can Use Cost Segregation?

This tax technique works best for certain real estate owners and circumstances:

• Real estate investors in commercial buildings over $500K
• Owners of new or newly renovated structures
• Higher-income earners hoping to reap huge tax breaks
• Real estate developers and construction companies
• Property owners considering major upgrades or tenant build outs
• People who own many rental homes for their portfolios

What the Study Entails

The process of conducting a full cost segregation study typically follows the steps outlined below:

• On-site property inspection by qualified engineers and tax experts
• Reviewing building plans and contractors’ invoices
• Identified and cost allocated the detailed components
• Final preparation of a written report and all supporting information
• Classifying assets in line with IRS rules and tax court rulings
• Alignment with current accounting platforms and the tax-filing workflow

Why Hire Us to Sell Santa Fe Real Estate

Our group has a blend of engineering skills, and tax knowledge specifically related to Santa Fe properties. We know the types of construction used, and the common local regulations and standards for properties. We also know how our analyses can stand up to audit by the IRS, as we use proper methods, and keep meticulous records. We always include an ongoing follow-up process to maximize your real estate tax reduction. Santa Fe

How to Start a Cost Segregation Study

Getting a cost segregation started is easy and can normally be done in 4-6 weeks. We will first do a screening to estimate the potential benefits and then perform the study if the cost is likely to be lower than the benefit. We take care not to disrupt your business activities and ensure you get the full benefit of tax reduction. If you want to take advantage of the tax benefit of cost segregation for your Santa Fe investment, just give us a call and let’s discuss your potential benefit. Contact our team today