New CARES Act Bonus Depreciation Can Save You Thousands!
Cost segregation has long been available at Monterey Motorsport Park. This IRS-recognized practice of classifying a building’s components — minus land costs — in 5-year, 15-year and 39-year property lets buyers accelerate tax deductions by writing off substantially more in the first few years, when out-of-pocket cash outlays are likely to be the highest.
Now, with the passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act and its reinstatement of 100% Bonus Depreciation for qualified property with a depreciation period of 15 years or less, you can use cost segregation to legitimately save thousands of dollars more in out-of-pocket costs in year one.
Take a 1st Year Write-off of Nearly 30%!
Traditionally, business property has been assigned a useful life of 39 years. Owners deduct the cost of a property — minus 20% or so for the land’s value — over four decades. However, relying on a detailed engineering analysis by a highly qualified expert, Monterey Motorsport Park’s cost-segregation study breaks down the building’s (and individual units’) value into 5-year, 15-year and 39-year components.
Shorter-life components include personal property such as carpeting, cabinets and wall coverings — as well as land improvements such as paving, concrete, fences, interior partitions, electrical, and plumbing. Until just a few months ago, these might have totaled up to about one-sixth of a garage-condo’s value.
But now, with the adoption of the CARES Act and its 100% Bonus Depreciation for so-called qualified improvement property (QIP) of up to 15 years, your first-year tax write-off will be approximately 29.5% of the purchase price of your unit. An almost 30% tax benefit in the first year! An extraordinary opportunity that will make your purchase at this one-of-a-kind complex that much more affordable on an after-tax basis.
Upheld in IRS Reviews and Audits
Cost segregation, backed by comprehensive engineering studies, has been upheld repeatedly in IRS reviews and audits over many, many years. This is not some high-risk, only-for-the-most-daring scheme. It’s a proven, practical technique your CPA will thoroughly understand.
Want to learn more and have something you can share with your CPA? Download our free, informative cost-segregation white paper — written with input from a CPA and based on a cost-segregation study by our expert engineering consultant. There’s no obligation.
Garage-Condo Sales Accelerating — Even Before the CARES Act Bonus
Monterey Motorsport Park closings haven’t been slowed by any COVID-19 uncertainty. Sales are approaching the 75% mark — meaning that your choice of units is rapidly narrowing. The complex is open and many owners have already moved in. In addition, new tours are keeping our brokers busy.
One important note: To qualify for 100% Bonus Depreciation under the CARES Act, you need to occupy your unit by year’s end. That may seem a long way off, but there’s a lot to do in a relatively short time. Tour and choose your unit. Arrange for the purchase. Qualify for financing or assemble the cash. Customize your mezzanine space and perhaps install a restroom, custom cabinets, sink with running water, wet bar, and anything else you desire. And of course, move in. You don’t want to miss the December 31st deadline!
To learn more and set up an appointment for a first-hand look at these unique, luxury garage-condos, contact any of our brokers:
- Josh Jones, Mahoney & Associates, [email protected], (831) 233-2196
- Ryan Clark, Cushman & Wakefield, [email protected], (831) 755-1635
- Dennis Chambers, [email protected], (408) 605-6760
- You can also get in touch with Gordon McCall, who has moved his business into a unit at Monterey Motorsport Park, at [email protected] or call (831) 372-9311.
- Or you can contact Ralph Borelli at [email protected] or call (408) 521-7117.
