Repair vs. Capitalization Tax Deductions for Real Estate Owners

Through our subsidiary MS Consultants, LLC, The Bonadio Group helps real estate owners take advantage of a “hidden” deduction possibility - one that could actually generate a significant tax advantage and put cash back into your pocket.

Federal court cases and IRS rulings have created a very narrow window for business owners to take advantage of what’s known as the “repair vs. capitalization” opportunity. The essence of this opportunity is that it may be possible to identify certain capitalized fixed asset items and reclassify them as a repair and by doing so, change the deduction equation significantly in your favor. This may be a simple concept, but its execution is not.

First, the clock is ticking on the opportunity to expense previously capitalized items because the IRS is writing new regulations, right now, that may  make it impossible to recover missed deductions from past years.  Second, there’s paperwork involved and lots of it. There’s a myriad of calculations and forms and submittals to the IRS that need to be completed before you see that big refund check. And last, but not least, you’ll need to have access to both tax expertise, and a depth and breadth of construction engineering experience,  in order to capture every single last penny of tax savings that is your due.

The MS Consultants team can help you find and capture these deductions. Built from the DNA of construction engineers and real estate tax experts, they know how to find and classify every possible improvement you’ve made to all of your building or locations. After all, MS Consultants has built its reputation on being the nation’s largest and most foremost experts in cost segregation studies and other creative ideas for real estate owners.