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Ah, summer. The season of beach vacations, family barbecues, and sunshine. And if you happen to be a CPA (Certified Public Accountant), it's also the season of...tax forms?

Cost segregation is a valuable tax strategy that can lead to significant tax savings for real estate owners and investors. It involves breaking down a building into its various components, which can then be depreciated over different time periods.

For the first time in many years, the Internal Revenue Service issued a revised Cost Segregation Audit Technique Guide to assist its Revenue Agents and Field Agents in determining the soundness of cost segregation studies submitted by taxpayers to substantiate accelerated depreciation deductions taken on filed tax returns.

The research and development (R&D) tax credit is a valuable tool for incentivizing innovation and research in many industries, including the beer and wine industry. This credit offers a dollar-for-dollar reduction in federal taxes for eligible research and development expenses, providing significant financial benefits to businesses engaged in these activities.

Self-storage facilities have become increasingly popular over the past few decades, as people look for ways to store their belongings without having to worry about cluttering up their homes or apartments. For owners of self-storage facilities, there are many financial benefits to be gained through cost segregation.

As mentioned in part one of this two part series, cost segregation is a very niche and complex strategy. Using a cost segregation study to accelerate depreciation and offset your tax liability (either partially or completely) is a powerful strategy. For many property owners, investing in a study provides great benefit – but this isn’t true for everyone. Cost segregation is not a one size fits all solution, and it doesn’t make sense for every situation.

Effective January 1st of 2022, as outlined in the Tax Cuts & Jobs Act of 2017, taxpayers can no longer fully deduct their R&D expenses in the year in which they are incurred. Instead, taxpayers must amortize their R&D expenses over five years for domestic R&D.

Cost segregation is a powerful tax strategy with the potential to save property owners a significant amount of money. Hiring a team to evaluate your property and accelerate depreciation on building components and land improvements can offset a significant portion (if not all) of your tax liability. If the study yields a surplus of deductions, they can be carried forward to future years.

Numerous business tax incentives are available to taxpayers for the achievement of economic goals. In general, these tax incentives are combined into one ‘general business credit’ for purposes of determining each credit’s allowance limitation for the tax year. The general business credit that may be used for a given tax year is limited to a tax-based amount.

With the increased popularity of wineries, advancements lead to more tax savings Vineyards and wineries have been in existence for thousands of years. Recently, however, they have become more than a center for manufacturing – they have transitioned into a destination for entertainment and tourism. People travel to a location specifically for wine, they host […]

IRS Practice & Procedure Alert: New R&D Capitalization Requirements in Effect for 2022, whether claiming the R&D Tax Credit or not!

Using Cost Segregation for a Cash Infusion to Reinvest in Your Hotel Running a successful hotel isn’t as simple as buying a property and renting rooms – although to the general public who frequent hotels, I’m sure that seems like the case. If you own a hotel, you already know the work it takes to […]

Cost Segregation is a highly advantageous tax planning strategy that allows companies and individuals alike who have either constructed, purchased, inherited, expanded or remodeled any kind of income producing commercial real estate to increase cash flow by accelerating depreciation deductions and reducing their federal income taxes. To supplement accelerated depreciation deductions, bonus depreciation is also […]

Taxpayers claiming Federal-level R&D tax credit claims have always found it to be a very onerous and arduous task ever since the inception of this incentive into the Internal Revenue Code back in 1981. However, claiming the Federal-level R&D tax credit just became even more challenging this year effective January 1st of 2022 because of […]

Residential real estate probably is not the first property type to come to mind when discussing cost segregation. In fact, there are many misconceptions that exist around residential real estate and tax deductions. It is heavily advertised that commercial properties benefit from cost segregation, but residential properties used for rental activities can benefit as well. […]

The food sciences and bio-flavoring industry continues to invest on a large scale every year to develop healthier food choices that contain: No Trans Fat; No MSG; Reduced Sugar; Reduced Sodium; Gluten Free; No Artificial Flavors; No Artificial Preservative; and No GMOs. These scientific advancements within the food sciences industry are significant for these new […]

The R&D credit program was permanently extended as part of the Protecting Americans from Tax Hikes Act of 2015. It contains many significant enhancements starting in 2016, including offsets to the alternative minimum tax and payroll tax for eligible businesses. The R&D credit program is still based on credit-eligible R&D expenses, but payroll tax offsets […]

On August 9th, President Biden signed into law the CHIPS Act of 2022 offering billions of dollars in grants and a generous income tax credit to jump-start semiconductor manufacturing within the United States. The CHIPS Act passed with strong bi-partisan support as a vehicle to bolster semiconductor manufacturing activities within the United States. The CHIPS […]

On Friday, September 30th, the IRS announced that the transition period during which taxpayers are provided 45 days to cure a R&D tax credit claim for refund under Sec. 41 of the Code prior to the IRS’s final determination on the claim has been extended through January 10th of 2024. Taxpayers are still required to […]

Cost segregation is a powerful tax strategy used by commercial and residential rental property owners to help free up cash flow and mitigate tax liability. It involves a detailed study of your building assets to identify which parts of your property qualify for accelerated depreciation expense. By this point you are probably thinking to yourself […]

Cannabis conjures up an array of emotions in many people. It has become a very hot topic in the recent past, drawing passion from both sides. With many states legalizing cannabis for both medicinal and recreational use – it is shocking that it’s still not legal at the federal level. With all of the controversy […]

On August 16th, the Inflation Reduction Act of 2022 (the “Act”) was signed into law by President Biden. This sweeping Act contains over 300 pages, yet still represents a scaled-back version of President Biden’s former Build Back Better Act from 2021 which was never passed into law. The 2022 Act passed the House by a […]

On May 26th of 2022, the Internal Revenue Service’s (the “Service” or the “Service’s”) Large Business and International Practice Unit (“LB&I”) released new administrative authority governing the I.R.C. § 179D deduction for building energy efficiency.

Tangible Property Regulations compliance services are best rendered by an engagement team made up of skilled tax professionals to interpret the latest tax laws and engineers to truly comprehend the building envelope including all its components and systems.

The Federal-Level R&D Tax Credit Program (the “Program’) was born out of the Economy Recovery Act of 1981 under the President Reagan Administration over 40 years ago. The Program has been credited to helping the US economy not only come out of our then deep recession of the early 1980’s, but also helped foster enormous growth across diverse industry sectors within the US economy for the last four decades!