KBKG, INC.719 E. Union Street

Pasadena, CA 91101(626) 449-4225

www.costsegregation.biz

KBKG, Inc. is a consulting firm specializing in Cost Segregation Studies. Our origin dates back to the 1940’s through our affiliated accounting practice that was founded in Pasadena, California. Our firm offers a unique combination of heritage, vision, and management teamwork, providing a variety of services to real estate owners, property managers, Certified Public Accountants (CPAs), and other consultants.

We emphasize recognizing opportunities and providing value to our clients. The strength of our firm is in understanding the complexities of taxation and construction engineering. Over the years we have used our experience and expertise to take advantage of ever changing tax laws for the benefit of our clients.

PRE-CONSTRUCTION CONSULTING

The best time to consider a Cost Segregation Study is even before the infrastructure of the building is set. Pre-Construction Consulting for tax purposes allows the project’s accountant and construction contractor to accurately track items that qualify for accelerated depreciation. This ultimately saves time and money for the investor as it lowers the cost of a Cost Segregation Study and minimizes the time spent in estimating and qualifying building components.

KBKG CONSULTING

CONSULTING KBKG, INC.

WHY PRE-CONSTRUCTION CONSULTING

At KBKG we understand the value and savings a Cost Segregation Study brings an investor upon the purchase of a building. However, we also understand the importance of making sure a study is performed in the most effective way possible. Proper planning through Pre-Construction Consulting cuts our time and costs enabling us to pass these savings along to our clients. KBKG’s Pre-Construction Consultants ensure that tax benefits are taken within the optimum timeframe and that the cost of a Cost Segregation Study is minimized.

CONSULTING FROM THE COST SEGREGATION EXPERTS

OUR PROCESSAt KBKG, we work with our client’s contractor, construction manager,or architect during the pre-construction phase to facilitate the cost segregation process. The procedure involves:

Educating the contractor on how cost segregation works Reviewing all construction specifications, preliminary blue prints, and preliminary construction budget reportsWorking with the contractor to set up a chart of accounts to segregate qualifying costs appropriatelyMonitoring all change orders to identify opportunities as the project progressesPreparing a final report with all supporting IRS case law, pictures, and schedules needed to sustain an IRS audit

YOUR SUCCESS IS OUR BOTTOM LINE

COST SEGREGATION SPECIALISTSAND REAL ESTATE CONSULTANTS

Pre-Construction Consulting

Cost Segregation StudiesFixed Asset StudiesAbandonment Studies

Specializing In Tax Saving Strategies For Real Estate And Personal Property

Your Success Is Our Bottom Line

KBKG, INC. 719 E. Union Street, Pasadena, CA 91101

KBKG, INC.

COST SEGREGATION SPECIALISTSAND REAL ESTATE CONSULTANTS

KBKG, INC.

A proper Fixed Asset Study requires not only tax expertise, but also an understanding of engineering and construction concepts. KBKG’s team of qualified engineers visit client locations to inspect and photograph assets,

identify their use and function, and review supporting documenta-tion including purchase orders, invoices, and blueprints. Our team then calculates the “catch-up” adjustments using our proprietary software. Our deliverable is a compre-hensive report that includes all required docu-mentation per IRS guide-lines including technical memos, supporting case law, detailed schedules of assets, and cost records for reclassified property. KBKG’s thorough analysis ensures that all assets are accurately classified in order to optimize tax savings.

At KBKG, Inc. our staff of engineers have the knowledge and experience necessary to accurately identify and reclassify a building’s assets. Our comprehensive understanding of engineering and construction concepts, combined with over 50 years experience in tax consulting and planning, provides the right solution to optimize tax savings. We partner with our clients’ CPAs, contractors, and other professionals to maximize tax-saving opportunities.

Similar to a Cost Segregation Study, a Fixed Asset Study evaluates a company’s assets and assigns misclassified

fixed assets to appropriate tax lives. While a Cost Segregation Study focuses on buildings, a Fixed Asset Study encompasses all fixed assets a company owns. This results in immediate and substantial cash flow by accelerating deductions on assets that were previously placed in service with improper tax lives.

Cost Segregation is a strategic tax-savings tool that allows owners who have constructed, purchased, expanded, or remodeled real estate to increase cash flow by accelerating depreciation deductions and deferring federal and state income taxes. By identifying building and property related costs that qualify for shorter depreciable lives and reclassifying these costs to appropriate categories, owners can take advantage of tremendous tax savings.

A KBKG Abandonment Study will quantify and segregate all improvements (long and short life property) in each tenant space by tax life and by suite number. This allows

owners to easily identify and write off abandoned assets.

The benefits of an Abandon-ment Study are even greater than those of a Cost Segrega-tion Study. The value of disposed “structural” compo-nents is generally the highest

cost spent in any given suite. Owners who are not appro-priately writing these off are simply leaving big dollars on the table and paying too much in tax. An Abandonment Study allows you to claim these losses and significantly increase tax savings.

An Abandonment Study is an expanded Cost Segregation Analysis specifically for non-residential income producing properties (leased properties). Not only does an Abandon-ment Study provide the benefit of quicker deprecia-tion deductions, but also the benefit of easily writing off any “structural” components that are removed when new tenants move in.

COST SEGREGATION STUDIES FIXED ASSET STUDIES

WHAT CAN COST SEGREGATION DO FOR YOU?

THE KBKG ADVANTAGEKBKG’S ENGINEERING-BASED APPROACH

WHAT ARE FIXED ASSET STUDIES?

ABANDONMENT STUDIES

“a lessor who disposes of a leasehold improvement may take a loss on its adjusted basis if the

improvement is abandoned at the

termination of the lease.” - 1996 Small Business Job

Protection Act

WHAT IS AN ABANDONMENT STUDY?

your success is our bottom lineKBKG, INC.

COST SEGREGATION FIXED ASSETS ABANDONMENT

HOW CAN YOU BENEFIT?

KBKG’S ABANDONMENT STUDY

QUALIFYING PROPERTYIncome Producing Property

(Non- Residential)

Multi-Tenant Office BuildingsBusiness ParksMixed Use Industrial PlazasCommunity Shopping CentersMalls

Benefits Of A Study

Optimize return on investments with our tax and engineering expertise

Significant increase in cash flow and tax savings

Can be applied to any asset/building as far back as 1987

Property tax savings

Any company with a substantial amount of fixed assets

Fixed Asset Study?

Any company with minimal depreciation book & tax differences

Any company where more than 35% of total fixed assets are real property

Who May Benefit From a

MEASURING VALUE

Every $100,000 in costs reclassified from Building to Land Improve-ments yields approximately $12,000 in benefits.

Appropriate segregation of costs results in substantial tax savings.

Every $100,000 in costs reclassified from Building to Personal Property can result in more than $20,000 in net present value savings.

This reclassification can be applicable to as high as 60% of a buildings total cost.