Today’s episode is Terry Judge, CEO of the Core Solutions Group, LLC. Their mission is to help their clients improve their asset value and other range of businesses, property, and investors, CPAs, and high net worth individuals. Terry’s company has become the premier tax specialty and engineering firm nationwide over the last twelve years. In this episode, Terry talks about his business and how they’re helping real estate investors understand cost segregation on a deeper level.
Important points in this episode
- Terry Judge started the company in 2006 and before he ventured into this journey, he never knew about cost-segregation then. He was more into tax, engineering, and accounting.
- There are billions of dollars in economic stimulus money for commercial real estate investors but this money isn’t given much consideration.
- There are two pathways in doing tax – the straight line, which is the normal accounting method and the cost segregation, which is the faster way to essentially right off your building. The cost is the basis of the purchase of construction, cost of the building, and others. There’s also segregation which means all the components like wiring, plumbing, irrigation, and more.
- The IRS considers the accelerated format, the breaking down of building where one can write off its components as the improved way and the straight line as the incorrect method in depreciating a building.
- You don’t lose the building The IRS also has some flexibility with the timing. Terry’s team does some look back study all the time with people who bought buy the building but never did the cost segregation process. The IRS allows them to go back until 1987 to recalculate the depreciation via a one-time automatic consent.
- The cost segregation process involves data collection, understanding the cost, building, blueprints, other necessary information including appraising, and others. The more data available afront, the smoother the project goes. It’s usually a 3-4-week process from start to finish.
- Cost segregation can become a very powerful tool on exiting buildings.
- Terry’s ideal clients/partners are CPA firms, real estate brokers or anybody in the financial world looking for bringing in more value.
- Check and connect with Terry Judge via his LinkedIn. You can visit his website here.
- Get the book ‘_The Miracle Equation: The Two Decisions That Move Your biggest Goals from Possible, to Probable, to Inevitable” _by Hal Elrod here.
- Listen to BiggerPockets podcast here.
- Email him at firstname.lastname@example.org
- “It doesn’t make business sense to not do a cost segregation study as long as you’re holding the property three to five years.”
- “Good tax planning is critical.”