For building owners and investors looking to avoid long-term capital gains on real estate properties, usually, the only option they see is a §1031 Exchange. However, another strategy, similar to a §1031, is called a §721 exchange. Both §1031 and §721 exchanges let investors defer capital gains taxes on the sale of a building. In a §721 …
How to Defer Capital Gains Taxes using a 721 Exchange Read More »
The Supreme Court in Washington State recently ruled that the state’s seven percent capital gains tax is constitutional. The ruling, which basically states that capital gains taxes are different from property taxes in the state of Washington, comes right after Biden’s tax proposal, which would almost double the long-term capital gains tax. In addition to …
Capital Gains Tax is Unfortunately Under Fire Again Read More »
As tax method change experts, one of the most common and contentious questions we hear is, “When is my building officially in service.” The in-service date is critical for tax planning purposes because once the building is in-service, the taxpayer can then accelerate depreciation deductions and use 179 deductions as well as partial asset disposition …
When is My Building Officially Placed in Service? Read More »
Businesses need to think before filing a claim for the Employee Retention Credit In a further warning to people and businesses, the Internal Revenue Service added widely circulating promoter claims involving Employee Retention Credits as a new entry in the annual Dirty Dozen list of tax scams. The Employee Retention Credit (ERC) is a refundable tax credit …
Beware of Firms Marketing the Employee Retention Credit Read More »
Not Signing a Form 3115 is Considered to be a Bad Sign Annually, the IRS compiles a “Dirty Dozen” list of 12 scams and schemes that taxpayers may encounter, especially during tax filing season. Day six of the campaign will hit home with building owners and investors who use cost segregation firms. Specifically, cost segregation …
Beware of Cost Segregation Firms Who Do Not Sign 3115s Read More »
Take Advantage of This Amazing Tax Opportunity When a taxpayer disposes of a portion of an asset used for making money, like a building, the disposed components have a taxable value that can be deducted in the year the assets were retired. This is missed by EVERY OTHER cost segregation firm as well as 95% …
Did You Renovate Your Commercial Property in 2022? Read More »
When and how do you change a method of accounting to use the final tangibles regulations? Under the Internal Revenue Code, a change in the method of accounting is usually a change in the handling of an expenditure. Meaning in the case of the tangible property regulations, the expenditure must be expensed or capitalized, or …
How to File a Tax Method Change to take advantage of the Tangible Property Regulations Read More »
According to IRS Publication 946, you begin depreciating your property when you place it in service for its intended use and use the property for the generation of income. You stop depreciating the property when you have fully recouped your original cost basis or when you take it out of service, whichever occurs first. You …
Generally, the final tangibles regulations don’t change the rules for deducting materials and supplies. The final tangibles regulations use existing court cases to decide on the exact definition and treatment of materials and supplies but added some safe harbors to provide clarification. Unfortunately, clarification from the IRS can sometimes just further confuse everyone. Materials and …
How do the Final Tangibles Regulations Change Deducting Materials and Supplies? Read More »
Behind the Scenes of a Cost Segregation Firm Nothing is as frustrating as contracting with a cost segregation firm to help you reduce taxes and then waiting for six, eight, or even twelve weeks to complete the study. While waiting, your CPA tells you your taxes have been completed, but the cost segregation study delays …
Why Do Some Cost Segregation Firms Take So Long to Finish a Study? Read More »
