Posted by steve on September 25, 2006 at 14:02:41:
I have had a Cost Seg study done on a similar sized property and paid about the same…it was money well spent…here is how you can figure out if it is good for you…let us say you have $100,000 additional cash flow during the first year…compute the PV of the returns that excess cash flow generates over 7 years…and do the same for the subseqent year excess cash flow generation…based on provided calculations, you are ahead by a mile (169+K).
TIC, Tax Cost Segregration Study - Analysis - Posted by Derek WA
Posted by Derek WA on September 25, 2006 at 05:02:27:
Greetings Fellow Investors,
I am a co-tenant in a Muli-Family TIC. The syndicator is suggesting the possiblity of accomplishing a Income Tax Cost Segregation Study to Increas Cash Flow. Property was purchased in 2005 for 4.2 million with a 7 year hold strategy. The cost of the study would be about 10,500.
Here is what they say they can do conservatively:
Sec.481(a)Depreciation Adjustment from prior 2005 $113,000
Anticipated Increased Cash Flow in 2006 $119,000
Net Present Value of Increased Cash Flow $180,000
(7% over the remaining life of facility)
So, anyone have experience with these studies and their application? How do I determine if the cost of the study is justifiable? The cost of the study would be shared amoung all the co-tenants and the cost can be written off as a business expense.