Real estate investing can be a risky venture — especially in today’s economy. Engineered Tax Services (ETS) can help you strengthen your investments and increase your Return on Investment through our specialty tax services.
As a commercial property investor/owner, there are several IRS-sanctioned tax benefits within your reach designed to uncover hidden value and profitability within your investments. We specialize in assisting property investment firms and their CPAs in identify areas of tax savings opportunities.
A cost segregation study is a federal income tax tool that increases your near term cash flow, in the form of a deferral, by utilizing shorter recovery periods to accelerate the return on capital from your investment in property. Whether newly constructed, purchased or renovated, the components of your building may be properly classified, through a cost segregation study, into shorter recovery periods for computing depreciation deductions. The study carves out, into 5, 7 and 15 year lives, certain qualifying portions of your building that are normally buried in 39 or 27½ year categories.
263(a) – TANGIBLE PROPERTY REGULATIONS
The Final IRS Regs relating to tangible property were issues in September of 2013 and provide for additional write-offs for most taxpayers. ETS can assist in creating required capitalization policies and identifying expenses for repairs and maintenance, which can reduce your tax liability and improve cash flow. First, we will identify which asset costs are not properly classified, then reclassify them as deductible repairs defined by I.R.C §162 and §263(a). Deductible repairs may include “incidental repairs” that help to maintain efficient operating condition but do not necessarily prolong its life and material value or adapt the property to a new or different use. Expenses incurred or paid for incidental repairs and maintenance are not considered as capital expenditures and may be reclassified to accelerate deductions in the current year.
HISTORICAL TAX CREDITS
The federal tax law offers effective incentives to taxpayers who contribute to the preservation of our nation's old and historic buildings. By rehabilitating directly or investing in the rehabilitation of eligible buildings, you can take advantage of one of two tax credits. The federal income tax credit is equal to 20% of the cost of rehabilitating historic buildings or 10% of the cost of rehabilitating non-historic buildings constructed before 1936. These credits provide a dollar-for-dollar reduction of income tax owed. Buildings eligible for the 20% rehabilitation credit include those used for rental residential as well as nonresidential purposes. Buildings eligible for the 10% rehabilitation credit must be nonresidential, commercial and industrial buildings. We can help you reap the tax benefits of rehabilitation and preservation projects as well as all related incentives and processes.
We are a nationally recognized leader in the valuation of Historical Properties and Antique Buildings. The valuation of historical properties is as much an art as a science. This type of appraisal involves properties that have been placed on a local or national historical registry due to their significant architectural style and/or another historical event associated with the residence. The appraisal process for historical properties is different from other single-family appraisals. It is critical that appropriate valuation procedures be used. We can help determine the insurable value of your property, but more importantly, we can help ensure that the proper value is determined.
NEW MARKET TAX CREDITS
The New Market Tax Credit (“NMTC”) program was created by Congress to encourage financial investment and economic development in lower-income communities throughout the United States. If you are developing real estate in an area that was either historically or is currently distressed, your project may be eligible for substantial tax credits established through the NMTC investment.
EPACT TAX DEDUCTIONS
We specialize in the energy certification process required by the IRS. The certification calculates the tax deduction achieved from the installation of energy-efficient assets. The deduction ranges between $.60/ft2 and $1.80/ft2. We have provided thousands of the highest quality energy tax certifications since 2005. Handling over 50 certifications every month, we have perfected the process by working closely with the IRS on a regular basis. Our LEED AP designation strengthens and adds depth to the ETS experience and qualifications under EPACT while supporting energy efficiencies under LEED. We offer a measurable dynamic to increase your return on investment and improve efficiencies – all with the goal of reducing operating expenses and obtaining additional tax deductions or credits.
Our forensic energy audit includes a detailed report with extensive and precise breakdowns of your current annual energy use and costs. You will understand your building’s energy efficiencies (or waste) and the alternatives to reduce energy use and operating costs. Our energy audit services range from a peripheral inspection to a fully detailed inspection audit. A comprehensive facility energy audit is a survey of a building or facility that provides sufficiently detailed information to allow an agency to enter into energy or water-savings performance contracts or to invite inspection and bids by private upgrade specialists for efficiency investments.
An added benefit of our Cost Segregation Study is that it contains DEIRA (Detailed Engineering-Based Insurance Replacement Appraisal) information that you may also use with your property insurance company to analyze appropriate coverage amounts. This cost segregation-DEIRA combined strategy can translate to major tax savings, reduced (recurring) insurance premiums and increased cash flow for savvy real estate investors.
To learn more about how ETS is helping real estate investors reap more rewards from their real estate investments, please contact us by phone at 1-800-236-6519 or visit our website: www.engineeredtaxs.wpengine.com.