YOU BUY COMMERCIAL REAL ESTATE FOR INCOME TAX BENEFITS

YOU BUY COMMERCIAL REAL ESTATE FOR INCOME TAX BENEFITS…

?

PART IV…

One of the biggest areas to save or defer income taxes is Bonus Depreciation after you do a Cost Segregation Study.?When you buy a commercial piece of real estate you are buying the land that the property is sitting on and the actual structure and also, and this is a big AND Tangible Personal Property.?The land is NOT depreciable because it’s going to be there forever and never go away.?The structure is the bearing walls and the roof because you need these for the building to be a building.?That’s a repetitive sentence but it’s right.?But the third thing that I mentioned is the Tangible Personal Property in the structure.

?

The tangible personal property in a multifamily housing facility, an apartment building, is the microwave ovens, the ranges, dishwashers, the cabinets and countertops in the kitchen and the bathroom, the doors and ceiling fans, etc.?So, tangible personal property is anything that is in the structure that can be taken out or off of the structure without destroying the structure.?The walls have to be standing and the roof has to remain to protect the structure.

?

Just because I am talking about multifamily housing or apartment buildings here doesn’t mean that it is the only commercial real estate asset that Cost Segregation Studies and Bonus Depreciation apply to.??Cost Segregation Studies and Bonus Depreciation apply to all forms of Commercial Real estate.?Just think of self-storage.?The garage doors on each unit and the other doors used by people to go from room to room and the cameras for the security system and the computers and ANYTHING that can be moved or removed without destroying the structure.?Just think of a shopping center or a shopping mall or a for profit university with all of the buildings and libraries and laboratories or doctors’ offices or office buildings.?EVERY piece of Commercial Real Estate has Tangible Personal Property and it’s all subject to Bonus Depreciation.

?

And, as time goes on and I am getting older and wiser I am finding out that you don’t have to do things the same way that everyone else does.?So, if you come up with a new and different way to build the facility that may just give you more Tangible Personal Property you then get more Bonus Depreciation.?There are more ways to build a self-storage facility than only one and I can get you MORE Bonus Depreciation than anyone else.??

?

Not just anyone can do a Cost Segregation Study.?You have to be licensed and you have to have the blessings of the Internal Revenue Service.?Cost Segregation Studies are normally done by engineers who can ascertain what part of the building is the “structure” and What part of the building is” tangible personal property”.

?

My partner, Fred Sams, isan expert in Cost Segregation Studies.?In fact, he just got back from a conference put on by one of the leading Cost Segregation Study companies in the United States.?I am Paul Levine, and I am an expert in Income Taxes as they are related to Real Estate.?I was a practicing Certified Public Accountant for over 50 years before getting into real estate.?I have more income tax education, knowledge, experience, and expertise than just about anyone else doing what I do.?And I am not far behind Fred in knowing about Cost Segregation Studies!

?

You can find my articles every day on Facebook on the “Paul Levine”, “Paul Levine, Realtor”, and “LS Property Partners LLC” pages and on LinkedIn.?My telephone number is (818) 298 – 4000 and you can reach Fred at (619) 289 – 9401.?Our email addresses are PLevine or FSams @lspropertypartnersllc.com.?Please call us with any questions you might have or if you have a special need that we can help you with!!!

?

Tomorrow article will be about Bonus Depreciation because I just set the table with Cost Segregation Studies to take Bonus Depreciation and defer lots of income taxes for years and years.