Benefits of Chattel Appraisals

According to a study released by the National Association of Realtors, approximately 22% of homes bought in 2006 fell into the category of investment property. Also, 14% were vacation homes and resort rentals. With the surge of new buyers entering the lucrative field of property investment, many are unaware of how to maximize their personal tax deductions.

Cost segregation studies, commonly used by experienced real estate investors, improve a structure's tax benefits by identifying, classifying and segregating building components with short-term depreciation. Chattel Riches facilitates this process by producing a summarized report, based on a comprehensive chattel appraisal and cost segregation study, that can then be provided to a tax consultant as supporting documentation for a tax schedule that can be used for the next five years.

Benefits for Investment Property Owners:

• Helps to defer up to thousands of dollars on personal tax deductions.
• Improves awareness about the rental home's various assets and how they affect the overall investment.
• Provides the Property Owner digital documentation of all assets that can be used in case of loss because of fire, flood, theft etc.
• Benefits for Tax Consultants
• Provides a 5-year IRS schedule to be used for depreciation of assets that qualify as chattel.
• Provides a cost segregation analysis.
• Produces a summarized appraisal of the property's assets with detailed valuation estimates for each item.

IRS Publication 527

Whether you are a real estate investor, accountant, property manager, mortgage broker, or real estate professional, you are going to be glad we are here!

A strategy used to maximize profitability by commercial real estate investors is now available and cost-effective to all real estate investors. A cost segregation study completed on the personal property or "chattel" in a real estate investment property will provide a break down for use in an accelerated depreciation allowed by the IRS for over 10 years.

Now, with a chattel appraisal, instead of waiting 27 1/2 years for depreciation, "chattel" inside of the property such as kitchen counters and cabinetry, appliances and carpeting can be depreciated over 5 years and outdoor "chattel" such as concrete driveways, landscaping or a pool can be depreciated over 15 years.

Most homes have more than $15,000.00 in chattel inside of the property alone. Using a 25% tax bracket, the tax savings from a chattel appraisal on the 5-year depreciation would be approximately $3,750 for that owner. A chattel appraisal can often create an after tax cash flow positive real estate investment and increase the benefits of keeping a home as a real estate investment, having a second home retreat or a vacation rental.

In addition to the tax benefits, a chattel appraisal creates an instant inventory with a written and visual description of the personal property. This is helpful when dealing with an insurance company in the event of a loss due to fire or a natural disaster and it is an independent verification of assets that allows for substantial savings on taxes.

Call for your personalized chattel valuation today!
(314) 369-6660