Cost Segregation Services in Atlanta, Georgia
Looking for a cost segregation provider in Atlanta? KBKG's local experts can help.
Cost Segregation is a strategic tax savings tool that allows companies and individuals based in Atlanta, who have constructed, purchased, expanded, or remodeled any kind of real estate to increase cash flow by accelerating depreciation deductions and deferring federal and state income taxes. In general, it is easy to identify furniture, fixtures, and equipment (FF&E) that are depreciated over 5 or 7 years for tax purposes. However, a Cost Segregation Study goes far beyond that by dissecting construction costs that are usually depreciated over 27 ½ or 39 years. The primary goal of a Cost Segregation Study is to identify all construction-related costs in Atlanta that can be depreciated over 5, 7 and 15 years.
For example, 20% to 50% of the total electrical costs in most buildings can qualify as personal property (depreciated over 5 or 7 years). Reducing tax lives results in accelerated depreciation deductions, a reduced tax liability, and increased cash flow.
CASE STUDY:
Walker Properties constructed a brand new office building in Atlanta.
The new building has 60,000 square feet and a lot size of 220,000 square feet.
Results: Year one deductions of over $400,000.
Year one increased cash flow of $170,000.
WHAT IS INVOLVED IN A COST SEGREGATION STUDY IN ATLANTA?
A quality Cost Segregation Study evaluates all information including available records, inspections, and interviews, and presents the findings in a clear, well-documented format.
Our process for conducting a detailed Cost Segregation in Atlanta includes: A review of all cost detail for the property including but not limited to: the general contractor's application for payment, construction invoices, change orders, depreciation schedules, and appraisals.
COST SEGREGATION FAQs
What should I consider when selecting a cost segregation provider?
You should always read the bio and resume of the persons signing your cost segregation study. Make sure they are certified with the American Society of Cost Segregation Professionals (ASCSP). The designation for certified cost segregation professional is CCSP and comes after the engineer's name. Any designation less than that is substandard. Just like you would only use a CPA to file your tax return, you should only use a CCSP to conduct your cost segregation study.
Is KBKG available if I get audited by the IRS?
Any company in Atlanta can give you a cost segregation report with results that save you a lot of money; the real question is whether it will stand up to IRS scrutiny. The true value of the fee you pay is how easy (or painful) the audit process goes. Every cost segregation company will say they stand behind their work, but how can you really know what will happen when the IRS audits the report? Using a larger company that has been in business many years should give you comfort that they can successfully defend their work against an IRS audit. Look at their client profile, bigger well known clients have a higher probability of being audited by the IRS. A company without high profile clients probably doesn't have a great deal of experience dealing with the IRS.
Does the company have tax experts that can help if my CPA has questions?
There are so many unique fact patterns and situations that can have a tax impact on how the cost segregation deductions will flow through on your tax return. A cost segregation engineer does not know enough about tax to truly understand how the cost segregation deductions will specifically impact you. Using a firm with tax experts on staff will save you money if your CPA has any questions regarding your specific situation. Using a cost segregation firm without tax experts in Atlanta means your CPA may have to spend several hours researching the answer and then charge you for that. KBKG has a staff of more than 10 tax experts with over 100 combined years of experience filing tax returns and won't charge you extra to provide answers we have already researched.
How long will it take to complete the study?
A cost segregation study in Atlanta will typically take 30-60 days to complete depending on how quickly we receive the information we need.
How much will a cost segregation study cost?
The fee for a cost segregation study in Atlanta will range depending on the building size, building type, number of tenants, and other physical characteristics. Typically fees can range from $5,000 to $15,000.
What are the Benefits of Cost Segregation?
Many business owners are surprised to learn of the compelling tax savings a cost segregation study offers. Below is a list of three of the most prominent benefits.
Cash Flow
Generates immediate increase in cash flow through accelerated depreciation tax deductions
Write Off
Quantifies property’s major components and leasehold improvements so they can be written off when replaced or renovated
Review
Provides an independent third-party analysis that will withstand IRS review.
Cost Segregation Tax Insights
Senate Votes on Tax Relief Bill for IRC 174 R&E Expenditures, Bonus Depreciation and Section 163(j)
08/01/2024By Jonathan Tucker | Principal, Research & Development Tax Credits In a significant move after months of waiting, the Senate voted on the highly anticipated tax relief for American Families and Workers Act, aimed at easing the financial burden on millions of Americans. Championed by Senate Majority Leader Chuck Schumer to bring a vote in … Read More
KBKG Tax Insight: Leverage Section 179 to Offset Declining Bonus Rates
07/30/2024By Eddie Price & Amar Patel | Principals – Cost Segregation After years of 100% bonus depreciation, rates have recently fallen to 80% for 2023 and 60% for 2024, which has motivated some real estate investors to look for additional strategies to offset taxable income. Section 179 of the tax code offers taxpayers the opportunity … Read More
Addressing Misconceptions Surrounding Transferable Tax Credits
07/29/2024With the renewable energy market continuing to expand, the popularity of transferable tax credits for funding projects and reducing corporate tax liabilities is becoming increasingly common. The signing of the Inflation Reduction Act in 2022 has further fueled interest among both developers and investors in this space, which has resulted in increased fraud that the … Read More
KBKG Tax Insight: IRS Issues Warning on Scams Involving Energy Tax Credit Transfers
07/19/2024By Amar Patel, CPA, CSSP | Principal – Cost Segregation The Internal Revenue Service (IRS) recently published an article issuing a warning about a new scam involving the misrepresentation of rules surrounding the transferability of clean energy tax credits under the Inflation Reduction Act (IRA). KBKG Insight: The market for transferable clean energy credits, notably … Read More
How the Inflation Reduction Act Expanded Transferable Tax Credits Eligibility
07/15/2024The Inflation Reduction Act (IRA) significantly altered the landscape of federal clean energy tax credits, offering new opportunities for monetization and strategic financial planning. For solar developers, these changes present a unique chance to optimize tax benefits through expanded options for investment and production tax credits in renewable energy projects. A New Paradigm for Tax … Read More
Final Regulations Released on Transferability of Clean Energy Tax Credits
05/08/2024By Mike Cornell | Senior Manager, Cost Segregation On Thursday, April 25, the Department of Treasury and Internal Revenue Service issued final regulations regarding the transferability of certain clean energy tax credits in a taxable year, including specific rules for partnerships and S corporations. The Inflation Reduction Act added Section 6418 to the tax code, … Read More
KBKG Tax Insight: Overcoming Passive Losses from Self-Rental Property Using the Grouping Election
02/27/2024KBKG Tax Insight: Overcoming Passive Losses from Self-Rental Property Using the Grouping Election By Eddie Price & Amar Patel | Principals – Cost Segregation When business owners acquire a building that they intend to use primarily to operate their business, they often set up a separate LLC to hold the building and land asset that … Read More
KBKG Tax Alert: Proposed Bill Fixes 174 Capitalization and Cuts Off New ERC Claims
01/16/2024KBKG Tax Alert: House passes proposed bill to Fix 174 Capitalization, Extend 100% bonus depreciation, and Cut Off New ERC Claims, now in Senate consideration. Proposal Aims to Boost Businesses with Immediate Deductions for Domestic Research and Experimental (R&E) Expenditures and Capital Investments on qualified property while reining in the Employee Retention Credit (ERC). The … Read More
Cost Segregation for Airbnb, Vrbo, HomeAway
11/18/2023Cost Segregation for Airbnb, Vrbo, HomeAway If you’re an Airbnb, Vrbo, or HomeAway host, you’re likely familiar with the complexities of managing and optimizing rental properties. What you may not be aware of, however, is a powerful financial tool that can help you maximize your property’s financial benefits while minimizing your tax liability – Residential … Read More
Unlocking Hidden Value: The Power of Cost Segregation Studies
10/17/2023Unlocking Hidden Value: The Power of Cost Segregation Studies Optimizing tax benefits and enhancing cash flow are pivotal to achieving financial success in finance and real estate. One strategy with significant potential is cost segregation. Dive into cost segregation basics, explore what a cost segregation study entails, understand its timing and relevance, and discover KBKG’s … Read More