Tax Engineered Cost Segregation – Hotel Renovations

There has been a lot of buzz out in the hotel industry lately. Everyone is wanting to renovate in order to capture more occupancy during this economy – but cash flow can, at often times, be unavailable for renovations.  This is where Cost Segregation or Section 179(d) Energy studies come into play. 

More often than not fixed assets are misclassified with a longer depreciation life on a slow depreciation calculation.  About 8 times out of 10 line items are bulked instead of separated out or classified properly —  classified as Real property instead of Personal.  There are many benefits to classifying what goes into your renovations properly: an accelerated depreciation schedule = additional year-end deductions = more money in your piggy bank = additional renovations or keeping staff. 

Should you have questions about Cost Segregation Studies, Tax Engineered Studies or Section 179(d) Energy studies, as always do feel free to reach out to us.  We love hospitality!

P.S.  When you gut rooms, banquet halls, reception areas, restaurants, or other amenities for renovation — remember, they are fixed assets too… run them through disposal!  Otherwise, its money in the trash.

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