Unpacking the IRS Cost Segregation Audit Techniques Guide
Cost segregation studies are complex undertakings that require a breadth of expertise and experience. The IRS Audit Techniques Guide outlines the complexities of cost segregation studies, and also lists the 13 elements that define a “quality study.”
Cost Segregation on Residential Real Estate
Anyone who owns an apartment, a duplex, or a single-family rental home is already claiming depreciation on residential real estate. But taxpayers that are still using the “default” 27.5-year, straight-line method of depreciation are missing out on a tax-saving opportunity.
Depreciation Methods: Straight Line and Declining Balance
The simplest method of depreciation is the straight line depreciation method, which simply deducts the cost of an asset evenly over the course of its recovery period. However, other methods of depreciation such as the declining balance method result in larger expenses in the early years of an asset's life.
Tax Savings Comparison: Regular Taxpayer vs. Real Estate Professional
Cost segregation can still be appealing for taxpayers who do not qualify as real estate professionals. Depreciation from a rental property can be used to offset that property’s rental income. If depreciation expenses exceed income, then the expenses are carried forward into the next tax year.
Capital Gains: Past, Present and Proposed Changes
This article will focus on how capital gains are assessed in the United States, proposed changes under the American Families Plan, and common strategies for deferring capital gains.
Use it Or Lose It: Clock Ticking on CARES Act Carryback
If your business shows a loss in tax year 2018, 2019, or 2020, then you can use that loss to offset your income from as far back as 2013. But how can you take advantage of this provision of the tax law if you aren’t showing an NOL this year?
Case Study: Cost Segregation After Natural Disaster
This brief post is intended to shed light on a cost-saving opportunity that is still available to building owners whose properties were damaged by the hurricanes.
Grouping and the Passive Activity Rules
Grouping can allow business owners to take full advantage of depreciation and other real estate deductions against their primary sources of income. This article will provide a convenient summary of the passive-activity rules and grouping procedures as outlined in IRS Publication 925.