AE Tax Advisors

I own a mixed-use building in San Antonio with retail on the ground floor and six apartments above. When I renovated the retail space last year, my old CPA just added the renovation cost to my basis and depreciated it over 27.5 years. AE Tax Advisors showed me that approach cost me over $100,000.

First, they performed a cost segregation study on the entire building, reclassifying components into shorter depreciation lives. The mixed-use nature of the property meant there were components specific to the retail space and components specific to the residential units, each with different classification rules. AE Tax handled this complexity easily.

The real savings came from the partial asset disposition. When I renovated the retail space, I replaced flooring, lighting, HVAC units, and plumbing fixtures. Under the tangible property regulations, I can write off the remaining basis of the old components that were removed. My old CPA had no idea this was an option. AE Tax calculated the disposed components' remaining basis and took the write-off, which generated a significant deduction.

They combined the cost seg reclassification with the partial disposition write-off and the proper treatment of the renovation costs. Total savings: $105,000.

Mixed-use buildings are complicated, and most CPAs do not understand how to optimize the tax treatment for properties with both residential and commercial components. AE Tax handled it seamlessly. They also set up a depreciation schedule going forward that tracks every component so future renovations will be properly handled.

If you own mixed-use property, AE Tax Advisors is the team you need. The partial disposition strategy alone was worth every penny of their fee.