Cost Segregation for Self-Storage Owners

Cost Segregation and Self-Storage Properties...Reduce Federal Income Taxes. Increase Operating Capital.
A typical self-storage unit averages 25% - 35% of its improved value as short-life property, which generates higher annual depreciation and reduces federal income taxes. Cost segregation studies minimize ordinary income to maximize return of capital and/or capital gain related distributions. They also create flexibility to achieve various operational objectives.

• Decreases a self-storage facility's income taxes, allowing the owner to invest the savings in capital improvements, reduce debt or simply improve cash flow.
  
• Provides immediate reduction in federal income tax through increased depreciation.
  
• Defers taxes on gains to a lower rate. Cost segregation changes the character of income based upon the nature of short life property (it physically depreciates) and the mechanics of reporting a sale. The bulk of the gain upon sale is typically allocated to land and long-life property.

• Leader in "look back" studies.
  O'Connor & Associates is the industry leader in "look back" studies having done more studies benefiting from Section 481a than any other boutique firm in the nation. Commercial appraisal is a core competency of our firm with extensive expertise in defining property values across dozens of land uses. We can establish and analyze a cost basis, even when such details are not available from original construction documents
  
• We don't "over-engineer".
  O'Connor & Associates combines the right balance of tax, accounting, valuation and real estate expertise without "over-engineering" what the IRS requires. This balance is reflected in our solidly competitive fees
  
• Fast turnaround.
  O'Connor & Associates' project turnaround is 4-6 weeks. Under special circumstances, it can be as short as 10 business days. This reflects our flexibility, customer focus and a well-tuned business process for generating cost segregation studies.
  
• Use of property appraisal experts.
  O'Connor & Associates streamlined our approach so your team is contacted by only one professional who collects information and coordinates technical requirements related to documentation, site visits, clarifications, etc.
  
• The O'Connor & Associates goal is to be upfront, honest and handle our client relationships with the utmost integrity. We know how important that is in today's business environment.

By: Patrick OConnor

Patrick C. O'Connor has been president of O'Connor & Associates since 1983 and is a recipient of the prestigious MAI designation from the Appraisal Institute. He is also a registered senior property tax consultant in the state of Texas and has written numerous articles in state and national publications on reducing property taxes.

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