Alternative Minimum Tax Consequences Are Not a Result of Cost Segregation

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Alternative Minimum Tax consequences are not a result of cost segregation. Nor is cost segregation accelerated depreciation. Decisions regarding cost segregation and accelerated depreciation are independent by the four options as illustrated in the following matrix:

Accelerated depreciation increases the amount of depreciation taken in early years of ownership but triggers alternative minimum tax consequences. The alternative minimum tax consequences are severe enough that many investors avoid accelerated depreciation.

A cost segregation study delivers the benefits of more depreciation sooner without the unfavorable alternative minimum tax repercussions. There are no alternative minimum tax consequences resulting for using cost segregation. Cost segregation with straight-line depreciation increases depreciation by 50% to 100% during the early years of ownership without triggering alternative minimum tax penalties.

Cost segregation produces tax deductions and reduces federal income taxes across the country and in every size market. Below are just a few examples of where cost segregation generates meaningful tax deductions.

New York, NY
Houston, TX
Washington, DC
San Francisco, CA
Memphis, TN Dallas/Ft. Worth, TX
Denver, CO
Phoenix, AZ
Orlando, FL
Philadelphia, PA
Cincinnati, OH
Madison, WI
McAllen, TX
Chicago, IL
Tulsa, OK
Austin, TX
Dayton, OH
Honolulu, HI
Stockton, CA
Boise, ID
Charlotte, NC
Durham, NC
San Jose, CA
Nashville, TN
Baton Rouge, LA
Buffalo, NY
Birmingham, AL
Indianapolis, IN
Manchester, NH
Oxnard, CA
Cost segregation produces tax deductions for virtually all property types.

Property Type:
Truck terminal
Airplane hangar
Convenience store
Single-tenant retail
Movie theatre
Health spa
Bowling alley
Almost every industry, including the following, can generate cost-efficient tax deductions by using cost segregation.

Textile product mills
Electronic and appliance stores
Truck transportation
Arts, Entertainment, and Recreation
Day care facilities
Furniture stores
Building supply dealers
Plastic and rubber products manufacturing
Chemical manufacturing
Computer and electronic manufacturing

O'Connor & Associates is a national provider of commercial real estate consulting services including cost segregation, due diligence, renovation upgrading cost analyses, income tax, tax return review and apartment inspections.

Patrick C. O'Connor has been president of O'Connor & Associates since 1983 and is a recipient of the prestigious MAI designation from the Appraisal Institute. He is also a registered senior property tax consultant in the state of Texas and has written numerous articles in state and national publications on reducing property taxes. He continues to set the standard in direction and quality of our appraisal products, adding services ranging from business valuations and business appraisals to cost segregation analysis for income tax reduction. For more information please today!

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