[music intro]
>>AARON HUGHES: Being in real estate, I’ve
heard about cost segregations and I was curious
how they would benefit our company?
>>DEB ROCK: Yeah that’s a really good question
because cost segregation is a tax-saving strategy
that more companies really should consider.
And there are three key points that I can
share with you to give you some insight as
to whether this is beneficial for your company.
>>ROCK: The first is how does it work?
So as you may know, a commercial building
is depreciated over a thirty-nine year life,
residential is twenty-seven and a half.
What cost segregation does is allows us to
recognize a portion of that building cost,
that can be recognized as personal property
or land improvements and depreciated over
shorter lives with accelerated depreciation
methods.
>>ROCK: What a lot of people don’t realize
is we’re talking about the purchase of a
building, renovations, lease hold improvements,
new construction and it’s not just in the
current period, we can actually look back
in time and do the same thing then.
>>ROCK: The second point is, what is the real
benefit?
And you’re still going to get the same depreciation
deduction regardless of whether you use the
cost segregation approach or not.
The real question is, do you want to take
a portion of your building costs and have
it recognized over those shorter lives – say
five or seven or fifteen years – instead
of the thirty-nine or twenty-seven and a half.
If you think about it, shorter depreciable
lives means greater depreciation deduction
up front, reduced taxable income, and of course
then it generates cash flow.
>>ROCK: Who wouldn’t like a little extra
cash flow to reinvest in their company, pay
down some debt, or whatever they can use it
for.
>>ROCK: RKL is a firm that is known for its
deep expertise and experience in cost segregation
and we perform over fifty studies every year
in just about every kind of industry – think
of car dealerships, retirement facilities,
manufacturing and even golf courses.
>>ROCK: So if you'd like to learn more information
about this, feel free to call us here at RKL,
or check out our website at www.RKLcpa.com.
[music outro]
