Cost Segregation

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Cost Segregation Studies “Unlocking The Cash Flow In Your Commercial Building” CPJ & ASSOCIATES LLC WWW.CPJASSOCIATES.COM

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Brought To You By: CPJ & ASSOCIATES in alliance with Cost Segregation Partners Congratulations on taking the first step in learning one of most exciting and lucrative tax strategies to put cash back into your pocket immediately as commercial property owner.

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This tax strategy is limited to … Commercial properties with a base value of $750,000 or more not including the land… If You would like to substantially increase your cash flow… Or you’re a CPA or other Commercial Service provider looking for strategies to put more cash into your clients pockets and maximize their investment… Stop What Your Doing And Pay Close Attention:

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Unlocking The Cash This presentation will outline the hidden cash flow strategy that can create significant measurable and immediate cash flow benefits for commercial property owners. If we could show you how you could increase your (or your client’s) cash flow by 100K or more this tax year would you be interested?

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What Would You Do With The Money? Complete a long awaited expansion? Use it to pay down debt? Reinvest into additional property? These are all great ideas and are completely possible using our tax strategy.

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Time Is Money Gallon of milk 30yrs ago was about .14 cents Gallon of gas was about .32 cents Average home was about $40,000 dollars If you believe a dollar today is worth more than a dollar tomorrow then naturally a tax deduction today is worth more than a tax deduction tomorrow.

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What Is This Tax Strategy? Cost Segregation According to the Wall Street Journal: The US Dept of Treasury states that “Cost Segregation is a lucrative tax strategy that should be used in almost every Major purchase of Commercial Real Estate”. June 03 90% of commercial property owners are not taking full advantage of this strategy. We are here to help small property owners compete with fortune 500 companies.

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How Does It Work? Cost Segregation identifies portions of the property that can be reclassified for depreciation purposes from real property (long life 39 yrs) to personal property (short life 5-15yrs). According to IRS regulations. Results in accelerated depreciation which reduces your federal taxes thereby increasing cash flow. 20-40% of many buildings qualify as personal property.

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Example:

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What We Do? Send engineers to your building to do an in depth survey of potential short life components in your building. We like to call it cash trapped behind the walls. Such components could be Electrical, HVAC or Telecommunication lines and Equipment.

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Who Benefits

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Cost Segregation Is Not New Engineering based cost segregation studies have been in existence since the Investment Tax Credit (ITC) of 1962. When the act was repealed in 1986 most people assumed that cost segregation studies no longer provided a benefit under the new tax law. However in a landmark 1997 tax court case, Hospital Corporation of America successfully defended the application under existing tax law.

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Recent Developments In 2002, the IRS made it easy to change your method of depreciation without the headache of an amended return. (Rev procedure 2002-09) Following the 911 tragedy the government allowed tax payers to catch up on all deductions from previous years for reclassified assets instead of having to spread them out across 4 years. (Rev procedure 2002-19) 2004 IRS reversed the two year waiting period required to change the method of calculation for depreciation on their property. (Rev procedure 2004-11)

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Questions & Answers If cost segregation has been around for so long why haven’t I heard about it? Since Cost Seg is a relatively new process for small property owners and it’s actually an engineering specialty most CPA’s may not have the expertise or knowledge of the tax strategy to offer it to their clients. Doesn’t a cost segregation study automatically flag an audit? No, our firm has handled over 2500 studies and only had two that resulted in an audit. However, not to worry if you are audited Cost Segregation Partners will defend you and we have not lost a case yet! It’s important to choose a firm that holds firmly to the IRS requirements for cost segregation study procedures.

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Questions & Answers Aren’t cost segregation studies expensive, is it really worth it? We generally only accept surveys that will receive the highest ROI with the most comprehensive cost segregation study on the market. We will not recommend a study that has less than a 10 to1 ROI. All your doing is deferring taxes and accelerating cash flow, does that really benefit me or my client? Yes, as we pointed out a dollar today is worth more than a dollar tomorrow. Are you trying to compete with my CPA: Absolutely not we perform a specialty service and in no way compete with your CPA. We work hand and hand with CPA’s and Financial Advisors as apart of your business team. My CPA has already done a Cost Seg: Unfortunately, all Cost Seg studies are not created equal many Cost Seq Studies performed have been Residual approach vs Engineering Comprehensive approach . This usually leaves money on the table and does not provide the comprehensive study required by the IRS which opens the door to other challenges down the road.

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Benefits and Features According to the IRS Cost Segregation Audit Technique Guide, “this is the most methodical and accurate approach”. Provides complete documentation including project reconciliation in a format developed by a “Big 6” accounting firm. Details the components costs for personal and real property which provides the ability to retire assets properly during a future remodel. The study is compliant with the IRS Audit Technique Guide and meets or exceeds the 13 Elements of Quality. Work is performed by engineers and cost seg specialists. The IRS states that the cost segregation studies require the knowledge of both construction process and tax law.

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The Bottom Line The Engineering Based approach to cost segregation maximizes your ROI.

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What Is The Next Step? Identify a building that qualifies – Base value of 750k or greater excluding the land. Do you operate as a for profit business and pay federal taxes? Was the building acquired, constructed or capitally improved since 1987? Do you plan to keep the building at least another year?

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If You Answered Yes… Complete a one page no cost Benchmark Analysis form which can be Downloaded Here Provide us with a copy of the depreciation schedule for the building if available.

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Your Free Analysis We will develop a no charge proposal outlining the estimated tax, cash flow and net present value benefits. You will see at this stage our fixed fee for completing a full study, should we proceed. This happens within 72 hours and the completed project can be completed in 30 days! Reminder: We do not recommend a study unless the ROI is at least 10 to 1.

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Last Step We conduct a conference call with you to go over the results of the proposal. This usually takes no more than 30 minutes and provides you and your financial advisor the opportunity to ask any questions. If you want to move forward you sign a contract and schedule the study. We deliver your complete study and will even complete the 3115 tax form necessary for you to take your tax deductions right away or you may opt to have your CPA complete it.

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Example Of A Study See Our Sample Cost Segregation Study Get Started Today! 1-888-216-9271 costseg@cpjassociates.com Fax Analysis: 334-836-1823 Download Benchmark Analysis *Commercial Providers: Contact Us To Learn How You Can Benefit By Referring Your Clients To Us

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