You don’t need to be Indiana Jones to find hidden treasure…
While the reward of great riches may be realized by finding that lost artifact or shipwreck, there is a tremendous investment in money, time, research, equipment, tools and perhaps risk of life in searching for that elusive lost treasure.
And fictionally, whether its Indiana Jones on the big screen, or Sam and Remi Fargo in the adventure novels by Clive Cussler and Grant Blackwood, these protagonists also do it for the adventure and challenge, which makes for a engaging entertainment. Fortunately finding this hidden treasure doesn’t have to risk life, require global travel or contend with unsavory characters.
If you invest in or develop commercial real estate, the treasure map is right in your acquisition closing statement or final pay application (AIA document). These maps are readily available, it just takes the right expertise to uncover, identify and maximize this hidden cash flow opportunity.
Finding this treasure is not fictional or a tax “loop hole”, it is clearly defined and in the IRS Guidelines, and this modern day treasure is essentially distributed by the U.S. Treasury Department in the form of tax incentives, that improve your cash flow (i.e. – treasure).
“Cost Segregation is a lucrative Tax Strategy that should be used in almost every purchase of commercial real estate.” | IRS, Wall Street Journal
If you own commercial real estate with improvements valued at $500,000 or more, there is very likely treasure hidden in your walls, under your floors, in the spaces over your ceilings, and both above and underground on your property. It can be identified by specialized engineering and tax experts.
Through a ‘fully engineered and accounted’ cost segregation study, the right professionals (essentially hired as your treasure hunters) will search out and identify every possible component in your building that qualifies for a shorter tax life. By breaking down these physical components, we enable the commercial property owner realize the increased tax deductions, resulting in improved cash flow or treasure.
Additionally, thanks to the recent Tax Cuts and Jobs Act once components are identified with a ‘short life of under 20 years’, the IRS has increased the bonus depreciation for year one components to 100% for properties for new, improved and used (acquisitions) effective September 27, 2017. The opportunity for these tax incentives and cash flow benefit may be at its best level ever.
Whether new construction, an acquisition, a renovation, or even within a property that has lain dormant in your portfolio for less than 12 years – there is likely tremendous cash value hidden within its boundaries.
The experienced “treasure hunters” at ELB Consulting can find it for you!