Have you ever read about lottery winners who win millions and decided to take the lump sum now versus the installments over more than twenty years? Why would someone make this choice? Any economist will tell you that if you have the opportunity to take the money now instead of spreading money out over time, take the money now. The economist will tell you this because they know the principle that a dollar today is worth a dollar tomorrow because it has the potential to earn. Having capital investment today will grow wealth for your future. This principle is known as the time value of money.
So short of playing the weekly lottery, how can you get money for your business now? The answer lies in the walls of your commercial building.
Like many commercial building owners, you are likely depreciating your building over 39 years. But did you know that parts of your building can be depreciated over a shorter life? With a cost segregation study, you can move your building components like specialty lighting, cabinetry, and even the exterior landscaping to shorter class lives like 5, 7, and 15 years.
Shorter class lives allow you to take more depreciation expense, which reduces income, thus reducing your income taxes. As a taxpayer, you will receive a significant tax benefit. This is your money to use now
If you have not won the lottery but instead own a commercial building, ask yourself, “Should I take the money now or over time?”
If you decide to take the money now, contact CSSI for a no-cost preliminary analysis on your building.
By: Lee Shreve