Construction Tax Planning

When included in the pre-design and design phase, Construction Tax Planning experts identify the materials and methods, direct and indirect, that maximize personal property and land improvements that qualify for accelerated depreciation deductions. With proper Construction Tax Planning, there is also no blurring of what is Internal Revenue Code Sec. 1245 personal property and Sec. 1250 real property, and the result is dramatic accelerated noncash income tax deductions, income tax deferrals, and cash flow generation. Read about Cost Segregation (Also Known as Construction Tax Planning) in the 2009 book ‘The Commercial Real Estate Revolution.’

Excerpts from the new book include:

“…with the right up front coordination with the architect, the depreciation benefit on an interior project like this could reduce project cost by up to 17 percent”.

“To get the maximum advantage, potential areas for reclassification should be reviewed as early as possible with other key stakeholders like your tax department and legal team-even in the pre-design stage”.

“Every dollar you can shift from a capital item to personal property results in a 20-cent savings. We estimated that you could recoup between $2.5 million and $4 million on this project…”

“And you are probably overlooking more than half of the opportunities available by taking this approach after the job is over. If it’s done before hand (i.e. cost segregation), you could reduce your cost by about 6 percent for the core and shell and up to 17 percent on the interiors, NPV”.