Cost Segregation
Purpose
Separate building costs into assets with different recovery periods for proper depreciation.
ATG coreLand
Land is not depreciable; must be separated from building and improvement costs.
non‑depreciableBuilding / Structural
§1250 property depreciated over the applicable building recovery period (39‑yr / 27.5‑yr).
39‑yrPersonal Property
§1245 property — shorter recovery periods (5‑yr, 7‑yr) for certain components.
5‑yr / 7‑yrLand Improvements
Parking, sidewalks, landscaping, fencing — may qualify for 15‑yr property.
15‑yrBuilding Components
Distinguish between structural components and tangible personal property.
component analysisElectrical Systems
Individual analysis: some components are building property, others qualify as personal property.
function‑basedPlumbing Systems
Generally building property, but certain components may require special analysis.
facility‑specificHVAC Systems
Classification depends on general building use vs. specific business process.
process vs. generalLighting
Exterior lighting (parking/walkways) vs. specialized landscaping lighting — different treatment.
site‑specificFire Protection & Alarm
Generally building components; specialized systems may qualify for shorter recovery.
safety systemsSpecialized Building Systems
Systems serving specific business activities may qualify as personal property.
activity‑drivenQualified Improvement Property
Interior improvements to nonresidential buildings may get special depreciation.
QIP§1245 vs. §1250
Central issue: distinguish personal property (§1245) from real property (§1250).
classificationRecovery Periods
Assign correct MACRS recovery period based on asset class and tax law.
MACRSPlaced‑in‑Service Date
Establish when property was placed in service; depreciation depends on this date.
PISBonus Depreciation
Identify property eligible for bonus depreciation; apply applicable law.
100% bonus§179 Deduction
Qualifying property may be expensed under §179, subject to limitations.
§179§179D Energy Efficiency
Energy‑efficient commercial building property may require separate consideration.
green buildingCost Allocation
Total cost must be allocated among land, building, improvements, personal property.
reasonable basisActual Cost Documentation
Invoices, closing statements, construction plans, fixed‑asset records.
source documentsEngineering Analysis
Fact‑intensive; combines tax law and engineering principles.
engineeringConstruction Documents
Contracts, plans, specs, change orders, payment applications.
project recordsDetailed Asset Schedule
Identify individual assets/groups, costs, classification, recovery period, depreciation.
asset listingCost Estimating
When actual costs are unavailable, use reasonable estimating techniques.
estimateUnit‑in‑Place Method
Estimate costs using established unit costs applied to quantities.
unit costingResidual Estimation
Assign remaining cost to residual category after identifying known costs.
residualReplacement Cost / Trending
Use current replacement costs adjusted for appropriate factors.
trendingStatistical Sampling
Sampling may be used; IRS may involve Computer Audit Specialists.
samplingReasonableness of Allocation
IRS evaluates whether allocation is reasonable and supported by facts.
reasonablenessConsistency
Classifications should be consistent with taxpayer records and tax law.
consistentChange of Accounting Method
May require Form 3115 and accounting‑method rules.
Form 3115§481(a) Adjustment
Depreciation method change may create a §481(a) adjustment.
§481Disposition Issues
Cost segregation affects assets subject to disposition and recapture.
dispositionPartial Asset Dispositions
Determine whether retired building components should be removed from basis.
partial dispositionDocumentation of Methodology
Explain how costs were identified, classified, measured, and allocated.
methodologyTax Law Support
Support classification with statutes, regs, rulings — not just percentages.
authoritySite Inspection
Physical inspection provides evidence of nature, quantity, function.
inspectionPhotographs
Substantiate existence and characteristics of segregated assets.
photo evidenceQuality of the Report
Sufficient detail to allow examiner to understand and verify conclusions.
report qualityRisk Analysis
IRS examines tax significance vs. resources required for audit.
audit riskSpecialist Involvement
Engineering, computer audit, and other specialists may assist.
specialistsFact‑Intensive Analysis
Highly dependent on facts, property use, and supporting evidence.
fact‑drivenAudit Trail
Permit examiner to trace allocation from original cost to segregated assets.
traceableReconciliation
Segregated costs must reconcile to total depreciable basis (excl. land).
reconciliationUnsupported Percentages
Blanket percentages or rules of thumb are vulnerable to challenge.
avoid blanket %Functional Analysis
Asset function is critical to determine structural vs. personal property.
functionSpecific vs. General Use
Whether asset serves general building operation or specific business activity.
use‑basedApplicable Asset Class
Identify MACRS asset class, not just recovery period.
asset classOverall Study Quality
IRS evaluates if conclusions are technically correct, documented, and supported.
defensibleMulti-Family Apartment
50-unit complex, $18.5M basis. Reclassified 35% to 5‑yr property + bonus depreciation.
50 unitsMedical Office Building
$22M specialty medical facility. 42% reclassified to 5‑yr and 7‑yr property.
35k sq ftSelf-Storage Facility
$8.2M facility. 32% reclassified to 5‑yr and 15‑yr land improvements.
600 unitsRestaurant & Hospitality
$9.8M full-service restaurant. 38% to 5‑yr equipment + interior improvements.
250 seatsRetail Shopping Center
$26M center. 41% to 5‑yr and 15‑yr property incl. parking & site work.
120k sq ftIndustrial Warehouse
$15.2M distribution center. 36% to 5‑yr and 7‑yr property.
80k sq ftHotel & Lodging
$32.5M hotel. 44% reclassified — FF&E, MEP, interior improvements.
180 roomsClass A Office Building
$28.5M high-rise. 39% to 5‑yr and 15‑yr property incl. tenant improvements.
150k sq ftAssisted Living Facility
$18.2M facility. 37% to 5‑yr and 15‑yr property.
80 bedsAuto Dealership & Service
$16.5M facility. 40% to 5‑yr and 7‑yr property incl. lifts & equipment.
12 service baysAbout Us
Alan Goldstein & Associates Tax Planning provides sophisticated, proactive tax planning for high-net-worth and ultra-high-net-worth individuals, families, business owners, real estate investors, entrepreneurs, and family offices.
We believe effective tax planning should begin before a transaction, investment, business decision, relocation, wealth transfer, or estate-planning event—not after the tax return has already been prepared.
Our approach is designed to look beyond a single tax return and examine the broader financial, business, investment, estate, and family circumstances that influence a taxpayer’s overall tax exposure. The materials supporting our practice emphasize coordinated planning, careful documentation, annual review, and adapting strategies as federal and state tax laws change.
What We Do
Our tax-planning work encompasses sophisticated strategies involving:
- Individual and business tax planning
- Business entity and tax-structure planning
- Real estate and investment tax strategies
- Cost segregation and depreciation planning
- Estate, gift, and generation-skipping transfer tax planning
- Dynasty and other advanced trust strategies
- Charitable planning, including charitable remainder and charitable lead trusts
- Family office and investment-expense planning
- State income tax, residency, and domicile planning
- Multi-state tax planning
- Cross-border and international tax planning
- Foreign asset reporting and compliance coordination
- Business succession and wealth-transfer strategies
- Advanced wealth-transfer techniques involving trusts, installment sales, GRATs, SLATs, SCINs, private annuities, and related structures
The firm’s materials demonstrate particular depth in sophisticated wealth-transfer and international planning, including trust situs selection, GST planning, foreign asset reporting, treaty considerations, state taxation, and multi-generational wealth preservation.
Our Planning Philosophy
Plan Before the Transaction. Many of the most significant tax opportunities disappear once a transaction has already occurred. We therefore focus on identifying opportunities and potential tax consequences before major financial decisions are implemented.
Look at the Complete Picture. Tax consequences frequently cross traditional boundaries. A business transaction can affect individual taxation. A change in domicile can affect state taxation. A trust can affect income, estate, gift, and generation-skipping transfer taxes. International assets can create both tax and reporting obligations. Our approach is therefore designed to coordinate these issues rather than evaluate them in isolation.
Integrate Tax With Wealth Planning. For affluent families, tax planning can be an integral component of broader wealth management. The firm’s materials specifically describe proactive, coordinated planning as a means of integrating tax compliance and tax efficiency into global wealth management.
Build Flexible Strategies. Tax legislation, regulations, administrative guidance, and judicial interpretations can change. Planning should therefore be designed with flexibility and reviewed periodically rather than treated as a one-time exercise. The firm’s materials emphasize annual review and adapting structures to legislative and enforcement developments.
Who We Serve
Our practice is particularly suited to clients who have complex financial circumstances, including:
- Business Owners — Owners of closely held businesses seeking to improve tax efficiency, structure transactions, and coordinate business and personal tax planning.
- Real Estate Investors — Investors and owners seeking depreciation, cost segregation, entity, disposition, and other tax-planning opportunities.
- High-Net-Worth Families — Families requiring coordinated income, estate, gift, trust, charitable, and wealth-transfer planning.
- Ultra-High-Net-Worth Individuals — Clients with significant investment portfolios, closely held businesses, trusts, multiple residences, international assets, or complex estate-planning needs.
- Family Offices — Families and advisors seeking integrated strategies involving investment structures, deductions, entity planning, estate planning, and tax efficiency.
- International Clients — U.S. persons with foreign assets, foreign businesses, foreign trusts, international investments, or multi-jurisdictional tax considerations.
A Collaborative Professional Approach
Complex tax planning frequently requires coordination among tax professionals, attorneys, financial advisors, valuation professionals, insurance professionals, trustees, and other specialists. Our role is to help identify tax issues and opportunities, model potential consequences, develop tax-planning strategies, and coordinate implementation with the appropriate professionals when legal, investment, valuation, insurance, or other specialized services are required.
Our Commitment
Our objective is not simply to prepare for the tax consequences of yesterday’s decisions. Our objective is to help clients make better-informed decisions today by understanding the tax consequences before they act. We seek to transform tax planning from a reactive compliance exercise into a proactive component of business strategy, investment management, wealth preservation, and legacy planning.
Important Legal & Professional Disclaimers
General Information Only. The information presented on this website and in our publications is provided for general informational and educational purposes only. It is not intended to constitute legal, tax, accounting, financial, investment, or other professional advice. The firm’s source materials similarly state that tax laws are complex, vary by jurisdiction, change frequently, and depend upon individual facts and circumstances.
No Client Relationship. Viewing this website, reading an article, downloading material, submitting an inquiry, or communicating with the firm through a website or other general communication channel does not, by itself, create an attorney-client, CPA-client, tax-advisor, fiduciary, investment-advisory, or other professional-client relationship.
Individualized Advice Required. Tax results depend upon the specific facts and circumstances of each taxpayer. Strategies described in our materials may not be appropriate for every taxpayer and may produce different results depending upon applicable federal, state, local, and foreign laws.
No Guarantee of Tax Savings. We do not guarantee that any particular tax strategy will reduce a taxpayer’s tax liability, avoid an audit, withstand IRS or state examination, or produce any particular financial result. Prior results or examples do not guarantee similar outcomes.
Current Law. Tax laws, regulations, IRS guidance, administrative positions, and judicial decisions are subject to change. State and local rules may differ materially from federal law. Information contained in publications should therefore be independently verified before implementation. The firm’s materials expressly caution readers that legislative and judicial developments can affect the application of the law.
Professional Advisors. Certain planning strategies may require the involvement of attorneys, CPAs, enrolled agents, valuation professionals, financial professionals, insurance professionals, trustees, or other qualified advisors. Clients should obtain appropriate professional advice before implementing any strategy.
Legal Documents. The firm does not provide legal opinions or draft legal documents unless such services are separately and lawfully provided by an appropriately licensed attorney. Trusts, business entities, estate plans, contracts, and other legal instruments should be reviewed and prepared by qualified legal counsel.
Investment Disclaimer. Nothing on this website constitutes investment advice, an offer to sell securities, or a recommendation to purchase any investment, insurance product, security, or financial product.
No Attorney-Client Relationship. Tax-planning information should not be interpreted as creating an attorney-client relationship. The firm’s source materials expressly state that educational material does not create such a relationship.
No Reliance Without Professional Review. Because tax outcomes depend on individual circumstances, information contained in our publications should not be relied upon as a substitute for individualized professional analysis. The firm’s materials expressly recommend consultation with qualified tax and legal professionals before implementing sophisticated planning strategies.
Legislative and Regulatory Risk. Tax planning strategies may be affected by future legislation, Treasury regulations, IRS administrative guidance, court decisions, and state-law changes. A strategy that is appropriate under current law may require modification or may become unavailable in the future.
Jurisdictional Disclaimer. Information concerning state, local, and international taxation may not apply in every jurisdiction. Residency, domicile, nexus, sourcing, trust situs, and other jurisdictional rules can be highly fact-specific.
Client Responsibility. Clients remain responsible for providing complete and accurate information and for reviewing and approving any tax-planning recommendations before implementation.
Use of Examples. Hypothetical examples, illustrations, case studies, tax savings estimates, and other examples are provided for educational purposes only and should not be interpreted as representations that a particular client will obtain the same result.
Last Updated. Because tax law changes frequently, website content should be considered current only as of its stated publication or update date. Clients should obtain a current analysis before taking action.