This engineering-based study is often misunderstood and underutilized, leading to unclaimed money slipping through the cracks to the IRS
Hotel owners are able to free up otherwise unused capital from their building and invest that money back into their business through a cost segregation study. Hotels that have been constructed or renovated to include energy-saving systems that reduce the property's total energy consumption can benefit from a cost segregation study.
As a company full of tax experts with over 50 years of experience working in the tax saving industry, we’ve heard every misconception in the book when it comes to cost segregation and why hotel owners are hesitant to believe that they’re eligible to benefit from it.
All hotels can benefit from having a cost segregation study performed. Even if a study has been performed in the past there could still be additional hidden, unlocked capital that has yet to be claimed. We’ve dug deep into the most common misconceptions surrounding cost segregation and have responded, respectfully debunking the concerns.
Debunking the Myths of Cost Segregation
If you don’t have a cost segregation study performed within the first year of purchasing a hotel property, you're out of time and can’t have one performed.
This is not true. You can have a cost segregation study performed on your property at any time during your ownership and are able to catch up by taking advantage of accelerated depreciation you would have received in the first year. In order to do this, you must file a Form 3115 Change in Accounting Method. National Tax Group will complete your Form 3115 for you as part of the process.
Only a CPA can provide a cost segregation study.
This is not true. Tax experts with a background in engineering and construction are the best individuals to take care of the engineering-based study for your property. National Tax Group does partner with CPA firms to provide cost segregation studies for their clients, as well as have our own private clients that we provide these services for.
Cost segregation increases your risk of an audit.
This is not true. However, having your cost segregation study methodologies and procedures accurately documented by a third-party tax group is essential to passing an audit. At National Tax Group, we guarantee a marginally low risk of ever being audited and provide full and complimentary audit support if ever necessary.
I am not eligible to have a cost segregation study performed because I am planning on selling my hotel property in order to buy another.
This is not true. If you’ve recently sold properties but haven’t yet filed taxes or reported the sale, you can still have a cost segregation study performed in order to maximize your deductions.
There is no benefit of having a cost segregation study performed if the value of my hotel is too low.
This is not true. A cost segregation study can be performed on a hotel with a basis as low as $500,000. Don’t count yourselves out of benefiting from this lucrative cost-effective study before talking to our team of professionals.
Unlock the Hidden Capital in Your hotel
You may have more questions, and that’s okay because we’re here to answer them and stand by your side throughout the process. Reach out to set up your FREE assessment of benefits and get to know the truth about cost segregation and how it can positively benefit you.