5 year cost recovery = $809,177 PV
7 year cost recovery = $756,657 PV
15 year cost recovery = $588,475 PV
39 year cost recovery = $321,512 PV
If you delay, you lose the time value of the money.
An example of reclassifying property valued at $1 million and accelerating depreciation over periods of 5 - 7 - 15 years:
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On Property and Asset Investments
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Why choose depreciation over 39 years, when you can separate items to write-off allowable assets over 5 to 15 years?
Buildings
Reduce Tax Liability / Increase Cash Flow
We perform a proven IRS compliant method titled Cost Segregation Studies, utilizing the engineered approach, to provide your CPA with the documentation that they require in order for you to properly take advantage of IRS allowable depreciation.
A complimentary feasibility analysis is provided at no cost or obligation to qualified property owners.
The IRS currently allows you to "catch-up" missed depreciation for existing properties that were not optimally classified prior to an IRS compliant Cost Segregation Study.
Cost Segregation
- the foundation for saving taxes. sm
The primary goal of a Cost Segregation Study is to identify all construction-related costs that can be depreciated over 5, 7 and 15 years. Reducing tax lives results in accelerated depreciation deductions, a reduced tax liability, and increased cash flow.
IRS: Cost segregation is a factually intensive determination that is based on complex tax law and engineering analysis. The preparation of cost segregation studies requires knowledge of both the construction process and the tax law involving property classifications for depreciation purposes.
A CSS will properly allocate costs to either real property or personal property, and classify those costs in the most optimal MACRS (modified accelerated cost recovery system) asset lives under the IRS Code, rulings, and existing Tax Court case law.
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PV = Present Value of Cash Flow
