Cost Segregation is essentially a tax-saving method tailored for property owners. By using this strategy, they can access their tax breaks more rapidly. Instead of viewing a building as one unified unit that depreciates consistently, this approach cleverly divides the building into various parts. Interestingly, each piece can depreciate at its unique pace. For example, while a typical residential building may depreciate over 27.5 years and a business over 39 years, certain internal elements, like specific fixtures, might depreciate in 5 or 7 years. Consequently, this differentiation allows owners to enjoy more timely tax savings.
* Data cited from internet sources and may not be 100% updated
Geraldine Serrano, a distinguished Tax Consultation Specialist at Veritax Advisors, specializes in aiding residential and commercial real estate investors through cost segregation. Her strategies and deep knowledge of tax law offer significant tax reductions and enhanced cash flow and inform her enlightening articles. Passionate about knowledge dissemination, Geraldine actively educates various professionals – from CPAs and real estate brokers to financial advisors and fellow investors. Her commitment to demystifying the complexities of real estate taxation underscores her invaluable role in the industry.
In this episode, Geraldine, a tax strategy veteran with a decade of experience aiding real estate investors, initially imparts her wisdom regarding cost segregation—a potent but often overlooked tax-saving tactic. Essentially, cost segregation hinges on a thorough engineering analysis of a property. By breaking it into its elements, one can pinpoint assets eligible for shorter depreciation periods, usually five or 15 years, instead of 27.5 or 39 years. On top of this, Geraldine underscores the strategy's efficacy with a remarkable tale of saving a client over $6 million in taxes for a mere $200,000 fee.
Furthermore, she stresses the broad applicability of cost segregation, which caters to residential and commercial property owners and businesses leasing spaces with self-owned improvements. To provide more clarity, Geraldine delineates the customary cost segregation process, emphasizing the pivotal role of physical inspections in ensuring accuracy and strengthening audit defenses.
Tune in to discover a treasure trove of insights that benefit real estate investors and business proprietors alike. In doing so, you'll shed light on a tax strategy that significantly boosts cash flow and potential tax savings, all while tapping into Geraldine's expertise!
“Cost segregation isn't just for million-dollar properties; it's a game-changer for residential and commercial real estate.” – Geraldine Serrano
“Cost segregation isn't just a tax strategy; it's a tool for long-term financial planning.” – Geraldine Serrano