Are you a tax professional looking to help your clients maximize their tax savings while staying compliant with the latest regulations? If so, you won’t want to miss our session at NATP TaxCon, Dec. 5-7, 2023. We’re Cost Segregation Authority, and we’re here to shed light on the world of cost segregation, Section 179D, and Section 45L energy credits and deductions. Let’s dive into the basics before you join us for this enlightening event.
Understanding cost segregation
Cost segregation is a valuable tax strategy that can significantly reduce your clients’ current income tax obligations. But what exactly is it? In simple terms, a cost segregation study identifies and reclassifies personal property from real property assets. By doing so, it shortens the depreciation time for taxation purposes, which translates into substantial tax savings.
Personal property, often referred to as Section 1245 property, encompasses non-structural elements of a property. These include items like lighting, carpeting, specialized electrical systems and more. But it doesn’t stop there; even land improvements can be depreciated over shorter lives through cost segregation.
The primary goal of a cost segregation study is to uncover all costs that can be depreciated over a shorter tax life, allowing your clients to take advantage of significant tax benefits.
Deciphering section numbers: §179D and §45L
Understanding the intricacies of tax codes and regulations can be a daunting task. Two sections that frequently come into play in the real estate and construction industries are §179D and §45L. Let’s break down what these sections mean:
- §179D energy efficiency deduction: This section provides tax deductions to building owners who make their properties more energy efficient. If your client invests in energy-efficient improvements to their commercial building, they may be eligible for substantial deductions. This incentive not only saves money but also promotes sustainability and environmental responsibility.
- §45L energy efficient home credit: If your clients are involved in constructing energy-efficient homes, they may qualify for the §45L energy-efficient home credit. This credit rewards builders and contractors for creating residential properties that meet specific energy efficiency standards, resulting in tax savings.
By understanding and leveraging these sections, you can help your clients unlock tax savings while contributing to a greener and more sustainable future.
Join us at NATP TaxCon 2023
Now that you have a grasp of the basics of cost segregation and energy credits, it’s time to take your knowledge to the next level. We invite you to join us at NATP’s TaxCon 2023 event, where you’ll gain insights into the latest developments, including proposed tax extender bills and other updates that could impact your clients’ tax strategies.
Our session will cover a range of essential topics, including:
- In-depth analysis of proposed tax extender bills and how they might affect your clients
- Real-world case studies showcasing the tangible benefits of cost segregation and energy credits
- A Q&A session where you can get answers to your specific questions and concerns
In the complex world of taxation, staying informed and up to date is crucial. By attending our TaxCon session, you’ll be equipped with the knowledge and tools to provide your clients with the best tax planning and savings strategies. We look forward to seeing you there!
About Cost Segregation AuthorityCost Segregation Authority was first established in 2006 in the infancy of modern cost segregation services. It was founded in large part by a father and son team who had spent their career in the construction industry and became passionate about the tax-saving strategies associated with real estate investments. This family culture has stayed with us for over a decade, and we endeavor to keep it this way for generations.
Our practice does one thing only—cost segregation.
You will find most cost segregation firms are full-time CPA firms or offer a dozen other services to maintain their margins. At Cost Segregation Authority our focus is exactly as our name implies. Hence, if you are a CPA or other tax advisor, you don’t have to worry about losing any tax return or other consulting revenue when introducing us to your clients. Our goal is to make you look good by performing the most accurate and tax-saving study possible. We are the good news in your practice and your partnership is paramount to our success.
Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.