What is Cost Segregation:
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.
- Approximately 65% of commercial property investors remain unaware or don’t utilize Cost Segregation.
- Each of these uninformed investors stands to benefit from an average of $750,000 in unrealized tax savings.
- Cumulatively, overlooking Cost Segregation leads to a staggering annual loss of $24.375 billion in unrealized tax savings across the U.S. market.
* Data cited from internet sources and may not be 100% updated
About Geraldine Serrano:
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:
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
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“Cost segregation isn’t just a tax strategy; it’s a tool for long-term financial planning.” – Geraldine Serrano
Show Notes:
- How Geraldine has been helping residential and commercial real estate investors reduce their tax liability and boost their cash flow through a powerful method known as cost segregation.
- Geraldine’s mission — To educate real estate investors about the often-overlooked tax strategy of cost segregation
- How cost segregation identifies assets that can be depreciated over shorter periods, resulting in substantial tax savings
- A remarkable tax-saving success story where Geraldine’s expertise saved a client over $6 million in taxes for a $200,000 fee
- What are the types of properties that benefit most from cost segregation
- How businesses that don’t own the real estate they operate can still benefit from cost segregation
- The step-by-step process of a typical cost segregation study, from the initial consultation to the physical inspection of the property
- How important timing is when considering cost segregation
- Geraldine’s top advice for real estate investors facing substantial tax bills
- A demonstration of the transformative power of cost segregation and how Geraldine saved a client from a $100,000 IRS payment
- How geographical location is no barrier to cost segregation, as Geraldine highlights her ability to conduct studies nationwide
- Why you should use this tax strategy opportunity for upcoming tax deadlines
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