What you won’t find at the NADA site...but desperately need to know

We went to the NADA site and looked around for information on Tangible Asset Regulations. There is lots of information….but all the Tax Professionals and CPAs missed one of the most important aspects of the temporary Tangible Asset Regulations as it pertains to dealerships.

Auto dealers that have completed major renovations in past years can now write down all the building components that were removed from the building.  The problem is that the tax professionals have no data on what was removed and what it was worth. 

A plain English explanation 

For most Auto Dealership remodel projects in the past, there was no tax mechanism to write down all the parts and pieces of your building that were removed.  The tax law usually required your CPA to keep the value of those parts and pieces on the books.  No write off and no tax deduction for the owner.

Tax professionals never inventoried what was being removed because there was no mechanism to write it off.  It had no tax value because there was no deductions to be taken.  So those parts are long gone, but their value is still buried in the books slowly depreciating over 39 years.

You may have had to replace a roof. The original roof was never written off.  That original roof is still on your depreciation schedule, buried in one big number labeled  “Building- 39 year property”. 

The new roof probably has its own line item on the schedule as “New Roof-39 year property.”  You still have 2 roofs on the book and slowly depreciating them both....Until Now.

“Who moved my Cheese?”

The rules of the game have changed in your favor.  The new Tangible Asset Regulations affect virtually every building owner...and especially Auto Dealerships.  With all the Manufacturer mandated show room renovations and new branding wall exteriors, Auto Dealership owners have substantial write offs from the past 15 years that can be taken in 2012 due to Tangible Regs write downs and Cost Segregation Deductions..

Showroom renovations, roof replacement, HVAC replacements, bathroom and office remodels all qualify.  That's the good news.

 "The IRS got your cheese."

The unintended challenge the IRS created is that they didn’t give the tax community a nice neat formula to figure out what a showroom renovation or a roof is worth because every showroom and roof is different.  The only advice that they gave Tax Professionals is that Cost Segregation is an acceptable method to value the removed parts and pieces.

“So what’s the solution?”

For over 10 years, and 7,000 studies, CSSI has perfected the art, science and engineering process of valuing parts and pieces of buildings in the tax application of Cost Segregation.

Show us a picture, gives us the old plans, tell us all about it and we can determine what and how much of the building was removed and thrown away and what was it was worth. 

CSSI specializes in doing the hard work that produces the numbers and documents that give your Tax Professional exactly what they need to scrub the depreciation schedules and write off those nonexistent parts.  On average, we return between $30,000 - $80,000 to the dealership.

“What’s in your dumpster?”

CSSI can turn those past dumpsters of debris into mounds of cash. 

Contact your local CSSI associate to discuss your past remodel projects to determine how much of your cash was hauled away with the trash and how CSSI will work with your tax professional to get it back.  It's your money.  Don't you want it back?