Did the Coronavirus convince more people to get a Cost Seg Study?
2 Big Reasons Why I Think You Should Give Yourself a COVID19 Stimulus Package with Cost Seg
Treasury Secretary Steven Mnuchin extended the Federal Tax Deadline by three months. Which means you now have until July 15th to make your annual payment to Uncle Sam.
The tax extension also gives property owners extra time to wipe out their tax dept completely.
It’s been said a lot since the Tax Cuts and Jobs Act of 2017... but right now is the absolute best time to accelerate depreciation with a Cost Segregation Study. Let me give a quick explanation for anyone who hasn’t taken advantage of a Cost Seg Study yet. A construction engineer can classify the different components of your building. Those components can be placed into faster depreciation schedules for tax purposes. Thanks to the 2017 tax law, anything 20 years or less can be written-off as an expense immediately with Bonus Depreciation rather than stretching it out over multiple decades.
Here are two big reasons why you should pull the trigger and cash in on a Cost Segregation Study.
1. 2020 is going to be rough. So get as much money as you can right now.
No one here has a crystal ball, but you don’t have to be a soothsayer to know that the Coronavirus Crisis is going to have a deep impact on the economy.
Goldman Sachs and Morgan Stanley agree that COVID19 has caused a global recession. Companies are laying off employees as tourism, sports venues, hospitality industry, airlines and others all take major hits.
Avoid paying a ton of 2019 taxes. Use that money to weather the storm, and be better set up to purchase more properties as the deals roll in.
2. You may have to hold your building a little longer than you expected.
The Multifamily Market is in a much better place than the average 401k. However, things will adjust in the coming months.
For example, Trump is "suspending all foreclosures and evictions until the end of April" and multiple cities have passed similar policies allowing tenants to skip rent without facing eviction.
You wouldn’t get a Cost Seg Study on a property you were going to flip. But, that property you bought in 2018 or 2019 may not find the right price in 2020. If your circumstances have changed, and a quick flip has turned into a hold, take advantage of Cost Segregation.