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James Lamont of Lamont Financial Services explains how property owners can use cost segregation and IRS approved asset classification methods to recover depreciation deductions from the past, present, and future.
Cost segregation is an IRS-approved tax saving strategy that allows commercial property owners to divide their properties into two categories: real property and personal property. The benefit of this “reclassification” is that personal property can be depreciated much faster (5, 7, and 15 years depending on the asset) than real property (39 years). This means that property owners can lower their tax burden and increase revenue simply by reclassifying assets they already own.
Cost segregation can be applied to buildings placed in service or significantly remodeled after 1987 (the year that current depreciation schedules were put into place). Many property owners aren’t aware of cost segregation and have not taken advantage of the opportunity. Some haven’t heard of it. Some have heard of it and think it might be frowned upon by the IRS and trigger an audit. It won’t–the IRS actually tells you how to do it.
Those who haven’t heard of cost segregation and have owned buildings for many years are allowed to “catch up” with their depreciation schedules and enjoy a significant windfall of tax savings and new cash flow. In 1999, the IRS announced that it would permit companies that have claimed less than the allowable […]
Did you know that there are 11 types of Individual Retirement Accounts (IRAs)? That’s right, there are 11 ways to set aside money for retirement as an individual. Most are versions of two types of IRAs–traditional and Roth, but it’s important to understand all of your investment options. Let’s start with those two and move on from there.
Social Security retirement benefits are meant to provide monthly income to eligible workers, as well as their spouses, survivors, and dependent children. There are a variety of strategies around when to claim benefits that can have a significant impact on the amount of money you can receive. In order to enjoy financial security and make the most of your retirement, it’s important to think hard about when to claim your benefit.
You are eligible for Social Security benefits at age 62, considered “full retirement age” by the Social Security Administration. For every year you put off collecting between age 62 and 70, you’ll increase your benefit between 5 percent and 8 percent. Many elect to work longer or to rely on other sources of retirement income to maximize social security benefits.
According to the Social Security Administration, almost 75 percent of taxpayers apply for social security benefits between age 62 and full retirement age. Some regret this decision, or simply had a change of plans. Prior to 2010, retirees could that changed their mind about electing Social Security benefits were allowed to “un-elect” their benefits and re-file at a later age, provided that they pay back all the benefits received up to the point of changing their minds.
Rules Have Changed
According to the Center for Retirement Research at Boston College, this loophole cost the Social Security […]
Did you know that there are 11 types of Individual Retirement Accounts (IRAs)? That’s right, there are 11 ways to set aside money for retirement as an individual. Most are versions of two types of IRAs–traditional and Roth, but it’s important to understand all of your investment options. Let’s start with those two and move […]