Valuation Services
Property
Tax Appeals – We Check the Value for Free.
Is it possible that your facility is paying too much in property taxes? John will analyze your assessment and if it is too high, he will appeal it for you. All of this costs you nothing, since he takes a percentage of the savings. However, if travel is required, the client does have to cover those expenses. The first step is to call us and John will check the accuracy of your assessment. If your income has decreased in recent years, the value of your assets has probably also decreased, which may warrant a reduction in your assessed value.
John writes regularly for publications that
assessors around the country read. In the past
year, he has written 3 cover stories for Fair
and Equitable, the magazine of the International
Association of Assessing Officers, the organization
of which most assessors are members. This means
that he is generally known in any assessment
office he does business with, which adds credibility
to his claims when he represents a taxpayer to
request a reduction. He has saved companies hundreds
of thousands of tax dollars.
Buyouts, Acquisitions, Due Diligence, Estate Settlements and Asset-Based Lending.
John also performs valuations for many other
uses, and offers due diligence services for brokerage
transactions. In any situation where tax laws
require a new valuation, he can provide experienced
service. John has testified as an expert witness
for various tribunals and courts, and has served
as an administrative law judge (hearings officer)
for valuation disputes.
Cost Segregations – New IRS Rulings Increase Savings
A Cost Segregation Study is a strategic tax tool that allows building owners to reclassify the way they depreciate actual building costs among real estate, land improvements, and personal property categories. (This legitimate reclassification is based on both case law and IRS guidance.) The actual study is completed by a qualified appraiser. The goal is to accelerate depreciation from later years to the earlier years of a project’s life. This accelerates the depreciation deduction, and improves the cash flow. Court rulings have made this much more lucrative than it was in previous years. Hospital Corporation of America [HCA] v. Commissioner, 109 TC 21 (1997). There is also the possibility of retroactive savings for years past.
The basics of how this works is as follows: In depreciating a building, certain associated costs are reclassified from longer real estate lives (39 years for commercial and 27½ years for non-residential real estate) to shorter class lives of 5, 7 and 15 years, respectively.
Cost Segregation Example:
Consider the following example based on an actual cost segregation appraisal study. Suppose a taxpayer purchases a nonresidential building for $13,135,000 (assume the land is valued is $1,000,000, which would leave a balance of $12,135,000 to depreciate. If the taxpayer does not use cost segregation, straight-line depreciation must be used over 39 years.
In contrast, if an appraiser performs a cost segregation study, $11,285,000 would be allocated to the building, $50,000 to 15-year property and $800,000 to 5-year property. Allocating part of the purchase price to these two additional property categories results in tremendous tax savings. Of course, the actual savings would vary depending on the tax rate (bracket) of the owner, but the following table shows the actual additional depreciation.
John can give you an estimate of
what you will save with a cost segregation study,
but the savings is generally around 10 times
the cost of the study, depending, of course,
on the tax rate of the company or individual