KBKG Cost Segregation CPE Series
Field of Study: Taxes
Prerequisites: None
Advanced Preparation: None
Total Length of Series: 8 hours
Course Description:
COST SEGREGATION
ACCELERATE DEPRECIATION AND MAXIMIZE CASH FLOW
Cost Segregation is one of the most valuable tax planning strategies available to commercial real estate owners. By accelerating depreciation, it allows a property owner to increase current depreciation deductions on both new and existing facilities, thus minimizing their overall tax liability.
What You’ll Learn:
- How to measure potential savings
- How to identify clients who’ll qualify
- Engineering steps performed in a cost segregation study
- Key areas of the IRS’s Audit Techniques Guide and relevant legal history
- Using Cost Segregation studies in specific tax situations
- Cost segregation and 1031 exchanges
- How to choose a provider
- More!
June 7 : Introduction to Cost Segregation
Designed for CPAs and real estate professionals who are new to cost segregation, this course is a practical, broad-based overview of this popular strategy. Your instructors, who are all cost segregation veterans, will provide an in-depth background of the most current information, including recent developments, how to measure potential savings and identify clients who qualify, how a study is performed, depreciation rules, the correct deliverable format, and more. You’ll also discover how to add value to your practice by offering cost segregation and how to hire the right cost segregation provider.
METHOD: Group Internet-Based
LEVEL: Basic
FIELD OF STUDY: Taxation
PREREQUISITES: None
ADVANCED PREPARATION: None
I. COST SEGREGATION OVERVIEW
A. Cost Segregation Concept Defined
1. Similarities between Cost Seg and 1031s
2. Pros and Cons of Utilizing Cost Segregation
B. When Should a Cost Segregation Study be Performed
1. Qualifying Property
2. New Construction vs. Lookback
C. Tax Deferral Opportunities and Issues
1. Depreciation Rules and Examples
2. Cost Segregation Case Study
3. Recapture
4. Commonly overlooked applications
a. Abandonments
b. Structuring Lease Agreements
II. QUALIFYING PROPERTY: REAL VS. PERSONAL
A. Critical Court Decisions Governing the Classification of Property
1. Whiteco
2. Morrison Incorporated
3. Hospital Corp of America
4. Boddie-Noel
B. Special Tests
1. Permanency
2. Appearance / Function
3. Sole Justification
III. IRS AUDIT TECHNIQUES GUIDE
A. Audio Clip
B. IRS Industry Specific Guidance - "13 Principal Elements of a Quality CSS"
C. IRS Review and Examination of a Study - Audit Steps
D. Cost Segregation Methodologies
IV. COST SEGREGATION REPORT AND PROPOSAL PROCESS / THE ENGINEERING
June 14: Cost Segregation Case Law, History and Engineering
This webinar delivers a nuts-and-bolts understanding of some of the most important cost segregation fundamentals: relevant legal history, engineering steps, and the IRS’s treatment of the technique. Your instructors will provide critical in-depth information on the IRS’s Audit Techniques Guide (ATG) and address the different methodologies recognized by the IRS as well as reviewing several qualifying tests used to determine 1245 property. Of particular interest is coverage of the driving factors surrounding the IRS’s development of the ATG and the key elements agents look for during an audit. You will also discover how a cost segregation study is performed, the correct deliverable format and the proposal process.
METHOD: Group Internet-Based
LEVEL: Intermediate
FIELD OF STUDY: Taxation
PREREQUISITES: None
ADVANCED PREPARATION: None
I. QUALIFYING PROPERTY: REAL VS. PERSONAL
A. Critical Court Decisions Governing the Classification of Property
1. Whiteco
2. Morrison Incorporated
3. Hospital Corp of America
4. Boddie-Noel
B. Special Tests
1. Permanency
2. Appearance / Function
3. Sole Justification
II. IRS AUDIT TECHNIQUES GUIDE OVERVIEW
A. Audio Clip
B. IRS Industry Specific Guidance - "13 Principal Elements of a Quality CSS"
C. IRS Review and Examination of a Study - Audit Steps
D. Cost Segregation Methodologies
III. COST SEGREGATION REPORT AND PROPOSAL PROCESS / THE ENGINEERING PROCESS
A. Typical Project Procedure
1. Estimate of benefits
2. Define and agree on terms
3. Analyze data
4. Site visit
5. Review data
6. Create report
7. Engineer's certification
8. Narrative
9. Executive Summary
B. Proposal Process
1. Information Needed for a Proposal
2. Cost : Benefit Ratios
3. Engagement Letter
IV. RECENT CHANGES
June 21: Cost Segregation Tax Planning Opportunities
You know that cost segregation studies offer tremendous tax advantages to real estate owners. Now this webinar gives you important insight into how a cost segregation study can work in important tax situations: estate tax planning, passive losses, net operating losses, like-kind exchanges, lease provisions, tenant improvements, and more. Additionally, this course will address the Form 3115 and how taxpayers can use this form to allow under-depreciated assets from both open and closed tax years to be depreciated within one year without amending returns. We will address 3115 restrictions, review the form in detail, and cover the required attachments.
METHOD: Group Internet-Based
LEVEL: Advanced
FIELD OF STUDY: Taxation
PREREQUISITES: None
ADVANCED PREPARATION: None
I. APPLYING DEPRECIATION RULES
A. Determining Land vs Building Allocation
B. Asset Class Lives
C. MACRS / ACRS - Estimated Quarterly Payments
D. Loss Carryforward and Carryback
E. Entity Structures
1. Individuals
2. Partnerships - Technical Terminations
3. Corporations
4. REITS
5. TICS
6. International Tax Treatment
F. Active vs Passive Income
1. Defining a Real Estate Professional
2. Passive Taxpayer and Multiple Entities
3. Self-Rental Rules
II. UNIQUE OPPORTUNITIES TO CONSIDER
A. Lease Provisions - Tenant Improvements
B. Estate Tax Planning (step-ups)
C. Abandonments
D. 1031 Exchanges
1. Why Property Owners Combine Cost Segregation and 1031
2. Eliminate Recapture Tax
3. Pre-exchange Planning
E. Go Zone - Bonus Depreciation
III. CHALLENGES TO CONSIDER
A. Planning for Depreciation Recapture
1. Overview of Recapture Rules
a. Allocate Purchase Price Favorably
b. Like-Kind Exchange Exception
B. AMT
C. Allowed vs. Allowable Rules (Rev. Proc 2004-11)
D. Leasing to Tax Exempt Organizations
E. Historic Tax Credits
F. Property Tax
G. LIFO adjustment
H. Real Estate Transfer Tax
IV. LOOK-BACK STUDIES - CATCH-UP DEPRECIATION
A. Automatic vs.Non-Automatic Change in Accounting Method
B. Amended Returns
C. Preparation of Form 3115 - 481a Adjustment
V. RECENT CHANGES, LEGISLATIVE OUTLOOK & REGULATORY INITIATIVES
A. Proposed Regulations
B. Qualified Leasehold / Restaurant Improvement
C. Self-Rental Rule - Beecher, (CA9, 3/23/2007), 99 AFTR 2d ¶2007-712)
D. Regulatory Initiatives
June 28: Cost Segregation Combined with 1031 Exchanges
1031 Exchanges and cost segregation studies are more popular than ever for the advantages they offer the taxpayer. In order to use both strategies on the same property, taxpayers must not only understand if the properties are like-kind, but also navigate around the depreciation recapture rules. This course addresses if and when cost segregation is appropriate for the frequent exchangor, the benefits and challenges associated with combining the strategies, and pre-exchange planning.
METHOD: Group Internet-Based
LEVEL: Intermediate
FIELD OF STUDY: Taxation
PREREQUISITES: None
ADVANCED PREPARATION: None
I. THE POWER OF STRATEGY: MASTERING ADVANCED §1031 EXCHANGE CONCEPTS
A. Exceptions
1. Property Held for Sale
2. Partnership Issues
II. EXCHANGE ENTITIES
III. DEFINITION OF LIKE-KIND PROPERTY
A. What is Excluded?
B. Qualifying Real Property
C. Qualifying Personal Property
D. Holding Period Issues
E. Vacation/2nd Homes
F. Tenant-in-Common (TIC) Ownership Programs
IV. THE EXCHANGE EQUATION
A. Rules for full tax deferral and boot analysis
V. CLOSING COSTS
VI. RELATED PARTY RULES
A. Who is a Related Party?
B. Simultaneous Exchange
C. Delayed Exchange
1. Selling to a Related Party
2. Buying from a Related Party
3. Buying from a Related Party who is Exchanging
VII. SPLIT TREATMENT EXCHANGES
VIII. THE DELAYED EXCHANGE WITH A QUALIFIED INTERMEDIARY
IX. IDENTIFICATION RULES
A. Section 1.1031(k)-1(g)(6)
X. HIGHLIGHTS OF A VALID DELAYED EXCHANGE
XI. WHAT NOT TO DO IN A DELAYED EXCHANGE
A. Christensen v. Commissioner
B. Knight v. Commissioner
C. Dobrich v. Commissioner
XII. PARKING ARRANGEMENTS
A. Revenue Procedure 2000-37
B. The Reverse Exchange
1. Replacement Property Parked
2. Relinquished Property Parked
C. The Improvement Exchange
XIII. SALE VS. AN EXCHANGE
XIV. CHOOSING A QUALIFIED INTERMEDIARY
XV. APPENDIX
A. Seller Financing
B. IRS Form #8824 (Like-Kind Exchanges)
II. COST SEGREGATION AND 1031S
A. Is Cost Segregation Appropriate for the Frequent Exchangor?
1. Similarities Between CS and 1031s
2. Differences Between CS and 1031s
3. Holding Period
4. Meeting the "Like-Kind Requirement"- State vs. Federal
B. Benefits in Combining the Strategies
1. Eliminate Recapture Tax
2. Depreciation on replacement property (Temp Reg 1.168)
C. Challenges in Combining the Strategies
1. The Like-Kind Hurdle
2. Allocation of Basis Dilemna
3. 1031 and CSS - Case Studies
D. Pre-Exchange Planning