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Week 2 Gains Ground

   
The second week of March was an improvement over week one, in which independent grocery sales were down significantly. In the second week, independent grocers reported that their same store sales were up slightly to the tune of 0.45 percent compared to the same period in 2016, despite customer counts being down 0.52 percent.
Early Bird Registration for 2017 FMS Financial Symposium Ends March 31
   
In the spring of 2017, FMS will be hosting a three day educational event designed specifically for our independent grocers. Attendees will have the opportunity to participate in several workshops and seminars that will give you more tools to help you succeed.

Learn from industry experts and guest speakers on the state of the industry, e-commerce, the latest best practices, and more. Registration includes several evening receptions where attendees can relax and enjoy downtown Baltimore. Attendees can earn up to 14 CPE credits on eligible sessions over the course of the Symposium.

Sign up by March 31 and save 50% on your registration fee.
Same Store Sales        
% Change from last year

Same Store Sales – Previous Months

BGBC Partners, LLP Tax Update: Cost Segregation Studies
You may have heard of a cost segregation study, or even had a specialist try to sell you one.  In this Tax Update, we are going to highlight the tax benefits of cost segregation studies, discuss factors which may point to whether you should have one done, and how to find a competent professional to conduct one.
 
The concept of cost segregation is not something new. It has however become more popular over the past 20 years. Some of the rise in popularity can be attributed to the Tax Court issuing several favorable rulings involving these studies.
 
The tax benefits of a cost segregation study arise from the identification of assets within a building which can be depreciated over a shorter life than they are prior to the study.  The real benefits come from reclassifying items which are being depreciated using 39 years, and reclassifying that asset to a 3, 5 or 7-year life.  Shorter lives mean accelerated depreciation deductions and that means less taxes in the current and near future.
 
So, when do you have a cost segregation done?  A Study can be conducted at the time a property is purchased, renovated or constructed.  However, if you have never had a Study done, or if it has been several years since you had one done, you should also consider it.
 
While there is plenty to be excited about cost segregation studies, the IRS does scrutinize these studies during tax audits. It is also worth noting that a position that is too aggressive might be challenged by the IRS resulting in a 20% penalty on any tax underpayments.  In addition, depreciation recapture on shorter-life property is considered ordinary income if there is a gain when the property is disposed.
 
Therefore, it is crucial that a qualified and experienced professional conducts the study.   So where do you find the right professional?  There are professional groups such as the American Society of Cost Segregation Professionals (ASCSP) which have professional testing and certification requirements for members.  Members include CPA’s and other professionals who are well-versed in the intricacies of what constitutes a depreciable unit-of-property, and the proper depreciable life of various assets.
 
Our firm, BGBC Partners LLP, has more than 20 years of experience conducting cost segregation studies.  We are very knowledgeable of the recent legal developments affecting these studies, and have a highly proficient team of experts who can deliver effective results, in a timely manner and cost effectively.
 
If a pesky auditor does come around, BGBC will defend the study and is willing to work with you on a reasonable fee for doing so.
 
In the end, the benefits can far outweigh the drawbacks of a properly performed cost segregation study. If you feel like your company may benefit from a cost segregation study, feel free to contact BGBC Partners, LLP, for more information.  In the end, you may find that your building is a goldmine of accelerated tax deductions!

BGBC Partners, LLP is a full service certified public accounting and business consulting practice.  

For more information, contact
Brad Bell, CPA
or Steve Reed, CPA/ABV/CFF at BGBC Partners, LLP (317-633-4700).
For More Information,
Contact Mark Ehleben
877-435-9400 x1402
marke@fmssolutions.com
8028 Ritchie Highway | Suite 212 | Pasadena, MD 21122


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