Overview
When acquiring, renovating or building real estate, most taxpayers tend to overstate the amount of 39-year real property. This limits the depreciation deductions available to taxpayers in the early stages of their investment. A cost segregation solves this problem by reclassifying assets by maximizing the property eligible for treatment as 5-, 7- or 15-year property. This depreciation optimization frees up substantial cash flow.
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Experience & Philosophy
Our philosophy to fixed asset services including cost segregation begins with focus on the CPA-client relationship, ensuring expectations are aligned at project start to maximize the benefit to the client. Upholding our commitments to our CPAs and applying our technical expertise are at the core of each project. This is often the reason CPAs continue to utilize McGuire Sponsel to build incremental revenue through trusted specialty tax consulting.
How McGuire Sponsel Can Help
McGuire Sponsel’s unique approach to cost segregation employs civil, structural and architectural engineering knowledge coupled with tax law experience to identify components that qualify for accelerated depreciation. Our team’s blend of engineering and tax code expertise provides tremendous value throughout a project. The professionals at McGuire Sponsel perform a site inspection for every study and all costs, along with their classifications, are then documented to withstand IRS scrutiny.
Client Success Story
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$423M
NEW OFFICE BUILDING IN CHICAGO, IL
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$35M
FIRST YEAR INCREASED CASH FLOW
What Makes a Great Prospect
Studies can be performed for current year transactions or on a retroactive basis. While every client is unique, we typically see a consistent benefit when the following criteria are met:
- Acquisition or New Build in excess of $750,000
- Interior renovation in excess of $200,000
- Companies with large fixed asset schedules
- Companies that renovate or make repairs frequently
Let's Talk
If a property has been acquired, newly built, or renovated, please connect with our practice leaders.
TALK TO A PRACTICE LEADERResources
- Case Study
- Webinar
- White Papers
Commercial Office Portfolio
McGuire Sponsel's cost seg team performed a cost segregation study on a $195 million portfolio of office buildings located in Arizona, Florida, Tennessee, Texas, and Washington D.C. Our specialists physically inspected the properties, tenant listings, and general ledgers to optimize depreciation and partially disposed assets. The result was a $9.4 million increase to the first year cash flow.
Using Depreciation to Plan for Recessionary Pressures
With the chance of a recession increasing taxpayers are starting to make moves to prepare for a potential recession. In this webinar we discuss how taxpayers can utilize depreciation and other timing issues to prepare for recessionary pressures. We discuss how to utilize the cash flow opportunities afforded by cost segregation to prepare for a downturn in the economy. We also review the updated cost segregation audit techniques guide and discuss how this affects cost segregation decisions.
Leasehold Improvements & Depreciation
For the last few years the IRS has allowed for certain leasehold improvements to receive special treatment for depreciation. While rooftop or outdoor HVAC units are not eligible for this treatment, the IRS confirmed HVAC units located inside a building and feeding tenant areas are eligible for 15-year treatment and bonus depreciation. This confirms the position McGuire Sponsel has taken for our clients.
Resources
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white papersFixed Asset ServicesOctober 31, 2024Cost Segregation FAQs
by Dave McGuireA cost segregation study can be a valuable tool to create substantial tax and cash flow benefits
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in the newsFixed Asset ServicesOctober 9, 2024
Podcast: Fixed Assets and Cost Segregation
by Dave McGuireDave McGuire joined Casey Peterson’s Generally Accepted Accounting Podcast (GAAP) to discuss cost segregation and depreciation.
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podcastsFixed Asset ServicesOctober 3, 2024
From Policy to Practice: The Historical Landscape of Cost Segregation
by Tim LeMasters & Dave McGuireIn this episode of Let’s Talk Tax, host Tim LeMasters discusses the history and intricacies of cost segregation with expert...
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case studiesFixed Asset ServicesSeptember 24, 2024
Auto Dealership
by Dave McGuireMcGuire Sponsel was contacted by a CPA firm to conduct a cost segregation study for a recently purchased auto dealership...
