Introduction

Cost segregation is one of the most underutilized tools for Massachusetts commercial real estate investors to boost their property tax returns. Cost segregation is a tax accounting process that identifies real property components that can be depreciated over shorter periods, thereby resulting in faster tax savings and improved cash flow.

The Mechanics of Cost Segregation

Cost segregation is a legal tax planning strategy that allows for the acceleration of depreciation deductions on an income-producing building in exchange for a small fee paid to an engineer. An engineer reviews your Boston building and identifies individual items, such as carpet, light fixtures, art and landscaping and mechanical components, that are depreciated on a 5, 7 or 15-year schedule (not the 27.5 and 39 year schedule). In other words, the building is not one single depreciating asset, but several depreciating assets with their own individual life spans.

Advantages for Property Owners

Cost segregation studies can bring huge benefits to Boston-area business owners and real estate investors:

• Quick tax breaks with accelerated depreciation write-offs.
• Better cash flow from lower current-year income taxes
• Catch-up to depreciation on previous years
• Higher returns on real estate holdings
• Defer capital gains tax on real estate sales
• Better financial statements can lead to increased borrowing capacity.

Who Needs Cost Segregation

The following types of property owners in Boston will benefit most from this strategy:

• Owners of commercial real estate with a property value of $500,000 or more
• Apartment building owners & rental housing investors
• Owners of restaurant and retail properties
• investors in medical and professional office buildings
• Owners of manufacturing and warehouse facilities
• Property managers for hotels and the hospitality industry

Details of the Study

Our detailed cost segregation study procedure maximizes tax benefits for your Boston investment:

• Certified engineers to conduct detailed onsite property inspection
• Review of project records, blueprints and invoices
• Component by component asset classification analysis
• IRS-compliant calculations and accompanying documentation
• A polished, professional report tailored for your tax return and ready to support you in an audit.
• Talk to your current tax consultant for a smooth transition

What Makes Us the Right Fit for Boston Properties

We are accustomed to working with properties in the Boston region, as we know the unique style and construction of the architecture and building throughout the New England states. We rely on our connections with local construction workers, architects and construction companies for a greater understanding of the study process. Our engineers are also certified and knowledgeable about the latest IRS guidelines and rules to ensure you’re getting the most out of your investment. Boston

Getting Ready to Start Your Cost Segregation Study

Schedule a call now to speak with our team about your Boston properties. Our team will provide you with a preliminary evaluation of your tax savings to help you determine whether a formal cost segregation study is worth it. Our team is diligent and fast, so we can complete our research and analysis with as much minimal disruption to your business operations as possible. Our team is ready to answer any questions you have about how cost segregation can help boost your real estate returns while also reducing your current tax bill in a legal and IRS-friendly way. Contact our tax specialists today