Adam Torres and Joseph Viery discuss accelerated depreciation.
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Show Notes:
US Tax Advisors Group, Inc. is a firm that works mostly with real-estate investors, helping them save hundreds of thousands and sometimes even millions of dollars on taxes. In this episode, Adam Torres and Joseph Viery, Founder of US Tax Advisors Group, Inc., explore the US Tax Advisors Group, Inc. story and how it helps real estate investors save money on taxes.
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About US Tax Advisors Group,Inc.
USTAGI specializes in Cost Segregation Studies & Energy Tax Credits. They provide tax-saving strategies for commercial & residential property owners. USTAGI are able to help all levels of real estate investors save money on income taxes. Their team specializes in engineering-based cost segregation studies and energy tax credits. They service all 50 states.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, and if you’d like to apply to be a guest in the show, just head on over to mission matters.com and click on ER guest to apply. All right, today I have Joseph Veri on the line, and he is founder of US Tax Advisors Group, Inc.
Joe, welcome the show. Hey, Adam. Thank you. Thank you for inviting me. All right, Joe. So excited to learn more about US Tax Advisors Group, Inc. Today. I know that it’s a publicly traded company trading under U S T A G I. But before we get into that, and I wanna know a little bit more about, you know, how you got this started and why, but to get us kicked off, we will start this episode the way that we start them all with our mission matters minute.
So Joe, we at Mission Matters, we amplify stories for entrepreneurs, executives, and experts. That’s our mission. Joe, what mission matters to you? Well, US Tax Advisors Group, our main goal, our mission, is to reduce or eliminate income taxes for those who own investment real estate. Fantastic. And glad to and happy to bring mission-based entrepreneurs on the show to share, you know, why they do what they do, how they’re doing it, what we can all learn from it so that we can all learn and grow together.
That’s the whole point of this platform to learn and grow together. So great to have you on. And I guess just to get us started, I mean, how did you get started in your business? Like what made you wanna start? US Tax Advisors Group. So I was working for the California Association of Realtors starting in 2000.
And I worked of seven years as a consultant. And in 2007, if you recall, the real estate market in California fell off the cliff. And prior to that I had a associate who kept wanting to explain the strategy. And I thought he wanted me to sell soap or something. So I kept blowing him off and finally I said, okay, Mike, let’s go and have lunch.
So he went and had lunch and he told me about what we do. We provided a service called cost segregation, engineering based service. And I had a couple clients who um, were really hurting cashflow wise and they couldn’t pay their. Tax bill. So I introduced them to the strategy. Everything went saved them a lot of money.
And then, like I said, the industry kind of collapsed the real estate industry in 2008. And the, engineering firm that I placed my business through, they said, why don’t you come work for us? So I segued went right into casas. And then about it’s about eight years ago, I started my own business.
Wow. what an amazing story. And so as you, like, were transitioning from working for someone else and, you know, working for another firm, and then you went out and, and started on your own. I mean, that, that’s never a like clean, clean transition. Like, there’s always some bumps or like some ups and downs in there.
Like, like how was that transition for you? Or, or did you have it all figured out and it went smoothly? You know what, it’s funny, I was just asked this question over the weekend. And this answer, I’m not sure, but basically you know, maybe I created my own luck, but the transition was really easy for me.
I had a base of clients who had a lot of money. They had deep pockets. Mm-hmm. So when their others were struggling and they were trying to sell their buildings, They were buying or they were buying loans. Mm-hmm. And then the, the people that you know, that owned the underlying asset, the building, a lot of them went under and they kept the asset.
So obviously they were paying a ton in income taxes. Yeah. So even from the get-go from 2008, I’ve never, I’ve never been slow, I’ve never looked down. my business model just took right off. Oh, man, I, I love it. That’s a great story. So let’s get a little bit more into the model. So I understand that you’re saying reducing or eliminating taxes, like, like how is that, how does that take place?
There is a, a fundamental premise of real estate. Well, there’s a lot of of great advantages of owning real estate tax advantages. And there is one component called depreciation. And of course, if you own real estate or you’re in any accounting, you know what depreciation is. That’s an expense. iris allows you to take, in essence telling you that your building is falling apart as you’re owning it.
So they give you an expense, a write off. And of course if you have taxable income your taxable income is reduced by the expenses. So what we do is we give them a huge bump in that depreciation expense by using the principles outlined by the irs. In the IRS audit techniques guideline, that basically says there’s a lot of components in the building that are not long life assets.
So if you do not accelerate the depreciation, what you’re doing is you’re taking the basis of the building for a commercial building, you’re dividing my 39. For residential, you’re dividing by 27 and a half, so you’re getting a really small expense every year for either 39 or 27 and a half years. Mm-hmm.
However, if I were to point like let’s say I’m in a hotel and I point down at, the floor and it’s carpet and I’d say, is that carpet gonna last 39 years? Mm-hmm. You’d laugh at me, you’d say, are you crazy? Well, the iris has hundreds and hundreds and hundreds of components of the building that have shorter lives.
So bottom line is, as an engineering firm, our job is to dissect the building and all the components and put everything in the appropriate lives, shorter lives, so that we can accelerate that depreciation. So instead of waiting for 39 years, bing, but boom, we’re gonna give it to you all at once in tax your 2022 if you haven’t filed your taxes.
Yeah. And so that’s based. And so what is the, what does this process look like? So I understand you said you’re an engineering firm. I understand that. So are you at physically, like going into the building and examining it? Like how, how does the process look? Well, it depends on the type of building. Mm-hmm.
So we’re one of the few out there that will work with smaller buildings. Mm-hmm. So we’ll work with, with a, I’ll make the number up. We’ll work with a, a building, a single family home in Alabama. Somebody bought for $120,000. When we do that type of study, we’re doing an analytical study. We’re not going to the building and measuring.
We’re using our inside statistics and our history, and the engineers will say, for this building at this address, this location, this is what you can expect to find in all the assets of the building, all the components. So it’s an overall view. We don’t go out and, and measure. Mm-hmm. If we go to a bigger building, let’s say a hotel, million hotel, we will have to go to the building, we’re gonna have to measure all the building components, and we’re gonna have to document the building.
We’re gonna have to take pictures to show the IRS that somebody went out there and actually inspected the building. Mm-hmm. So it’s, it’s kind of two different processes. Mm-hmm. and we basically do many, many studies using both processes. Yeah, no, I get it. And it makes sense. And I was you actually took one of the the questions outta my mouth there Joe, which is what type of buildings or owners do you work with?
So I just wanna make sure I understood this correctly. So you’re saying that individuals that. Have as little as a single family home where that they’re renting out to somebody or somebody with a, you know, a large building. Like you have expertise in your team and you can really handle that entire, you know, and that entire client base.
Am I off on that or I’m understanding that right? No, you’re right. my largest was a city block. In Union Square, San Francisco was a, that was a $500 million piece of business meaning the real estate development was 500 million. Mm-hmm. And then like I said, I do single family homes in Alabama that somebody bought for 120,000.
So we, we are one of the few that have expertise in mm-hmm. Basically any type of building, any size, you know, whatever, whatever square footage. Now I always, whenever we’re talking taxes and things like that, I, I always, of course, like to tell my, my audience that if they want, you know, individual tax advice on their, on their situation, like, you know, you definitely want to, you know, be working with a team.
And it seems to me like this piece of a team is, I mean, just to be upfront like you’re not doing anything that there’s nothing illegal. There’s no, this is nothing like that. It’s not about, it’s not about not paying taxes. What you’re doing is you’re using. What the IRS’s rules and their own guidelines, and you’re just using them effectively for the, in this case, in the best interest of the taxpayer.
But which by the way, it’s just saying that like your, your local, your cpa, like their job is not to get into into what you’re talking about today. So it’s not that they’re doing a bad job or anything, it’s just not their specialty. Like, am I off on all this stuff? No, no, you, you described it perfectly.
When I first started in, 2007, the biggest pushback I got at that time was, this must be a scam. Yeah. This is too good to be true. It must be a scam. so we fought that battle and now, If there’s an entity out there that owns any type of decent size portfolio and they do not understand what I do, then there’s something wrong.
I probably wouldn’t work with them because something’s broken. Mm-hmm. Because every accountant knows what’s. What accelerated depreciation means, and I, the most common question I get is, well, why wouldn’t you do cost egg? Mm-hmm. Well, there’s only a few circumstances where it doesn’t make sense.
There’s so few that, well, one of them would be if you’re not paying income tax, then you don’t need me. I. But that seems silly, but there’s a lot of great reasons to own real estate and if you’re not paying income tax, you don’t need Joe. So, you know, you wouldn’t need me if you were gonna sell a property in a year and a half.
You don’t need me if flippers shouldn’t do cost egg because there’s another component called depreciation recapture. And so I tell my clients or per. Perspective clients. Look, you know, if you’re not gonna hold the property for at least a year and a half to two years, don’t be a client. I don’t wanna take your money.
Mm-hmm.
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So Joe first off, it’s been great having you on the show. If somebody’s listening to this and they wanna get started, like, how does this process look of evaluating if they’re gonna be a good fit to work with you and your team? Like, walk me through the process please.
So what we provide in, it’s a no charge. We don’t charge for this phase. And what we do is we provide an estimate. And before anybody gets too excited or they wanna talk in detail about what we do, I say let’s get an estimate first. And so I need a, a little bit of information on the property. If it’s a look back property, meaning that it was, purchased prior to 2022, I need their depreciation schedule, which was in their 21 tax filing.
And if it wasn’t, if it was purchased in 22, I need the answers to a few questions. How much did you pay for it? What’s the address of the property? What type of property? So , some basic, basic answers to those questions. And then I provide an estimate. I will look at the engineering time to do the property.
I will quote them a d and if they say, yeah, let’s move forward. Then the next step is I collect documents. So I’ll collect not a lot, but I need appraisals. Closing statements. If there are any construction plans, those are valuable. So I’ll collect the documents and then if it’s a, a project that needs a site inspection, we need to go out and look at it, we will go out and look at it.
But this all happens after they sign the proposal. So once I provide ’em with the estimate, I give ’em the fee, they sign the proposal, and off we go. It will take us anywhere from two weeks to six weeks to do the study. It just depends on the building. Mm. Fantastic. Well, Joe, it has been great having you on the show today.
And I think that my audience is gonna get a, a lot of value out of this, especially if they’re not using anything like this yet, or if this is a newer concept, or if they have been, but they feel like, you know, this is something that they, to revisit. That being said, if somebody’s listening to this Joe and they want to follow up and to connect with you and your team, what’s the best way for them to do that?
I think it’s pretty simple. It’s U S T A G i.com, U S T A G i.com. Fantastic. And we’ll put, those notes that website address and the show notes so that our team can just make it really nice and simple for the audience to click on the link and head right on over.
And speaking of the audience, if this is your, First time with mission Matters or engaging in an episode, we’re all about bringing on business owners, entrepreneurs and executives, and having them share their mission, the reason behind their mission, you know, what gets them fired up to get up in the morning and to go out there and to make a difference.
If that’s the type of. Content that sounds interesting or fun or exciting to you, we welcome you hit that subscribe button because we have many more mission-based individuals coming up on the line and we don’t want you to miss a thing. And Joe, really it has been a pleasure working with you today.
I wish you much more continued success. Good luck to you too. Thank you, Adam.
