11 September 2018 FT — Articles to Read

11 September 2018


List-Serve Question: Does anyone know where to find a schedule showing, for new construction, what is useful life broken out by cost category, e.g. HVAC, painting, hardware, etc.  Underwriting depreciation on a residential apartment new construction deal.  All I can find is a general summary put out by the IRS.  (Answer at bottom of email)


Question: According to MSN, what are 50 easy things you should do to save money?


ECJ to rule on limits of ‘right to be forgotten’ by Google – Pg. 2

–          Europe’s top judges are being asked to decide the limits of the “right to be forgotten” – a person’s ability to demand that internet search engines hide incorrect, out-of-date or potentially embarrassing information about them

–          …European Court of Justice will today consider two cases involving Google: one on the type of information that should be delisted from its index after a search for someone’s name, and the other on whether such a delisting, if agreed to, should apply worldwide

–          The ECJ’s eventual ruling will not only affect Google but all other search engines, and is likely to have implications for social media platforms

–          The cases follow on from a landmark decision in 2014 when a Spaniard, who had his property repossessed and auctioned off in 1998 to recover social security debts, fought to have newspaper articles about the case removed form Google’s search results

–          The ECJ ruled in his favour and said the material should be delisted if it was “inaccurate, inadequate, irrelevant or excessive” – a ruling that created what is commonly known as the right to be forgotten

–          The first concerns whether sensitive personal data, such as political beliefs, health information, criminal records and sexual orientation, should be automatically removed from search engine results on request – regardless of public interest

–          Whether search engines must delete links globally or only in the EU, as is currently the practice, is the second question the ECJ will consider

–          Authorities and courts in Canada, India, Columbia and Brazil, among others, are considering similar right to be forgotten cases but are coming to different conclusions, illustrating the difficulty in establishing a general rule


US Drug Epidemic – Pg. 7

–          There are more than 1,000 lawsuits brought by states and local governments in the US alleging the drugmaker’s marketing practices ignited and then fueled the opioid crisis, which claimed more than 42,000 lives in 2016

–          (Prof Note: US Drug Epidemic?!  Last week I had a tooth extracted.  The dentist prescribed Oxy.  I take my prescriptions to Walmart, low cost provider of a commodity, what could go wrong?, and Walmart refuses to fill my prescription.  I am a first time customers and the prescriptions, according to Walmart, provide too much narcotics.  Blood is running down my chin, the novacaine is wearing off, I am becoming desperate .  I say, “ I need my Oxy.”  Walmart says, “No…policy”.  I say, “give me back my prescription.”  Walmart says, “No, you’ll just go to CVS.”  I say, “Damn straight!  Now give me back my prescription!”  Walmart says, “No…policy”.  I say, “Call the police.  I have done nothing wrong.”  Walmart calms down.  I say, “this is insane!  The more I complain the more I look like an addict.  If I do not complain you will not give me my Oxy!”  Walmart says, “quite the conundrum.”  I leave without my Oxy but with my prescription.  How are people getting these pills???!!!  I had a legitimate prescription, blood streaming down my face, and I could not get them!  Arrrggggg….)


Fed’s balance sheet shrinking has big implications for banks – Pg. 19

–          …as the reduction in the balance sheet accelerates into 2019, the market is looking for much clearer signs from the Fed on its future framework for steering the economy.  Some analysts worry that the Fed risks shrinking its balance sheet too much

–          The Fed confronts two major, intertwined decisions.  Does it want to stick with its current system for setting interest rates or revert to something similar to the framework it used before the financial crisis?  And how big a balance sheet is it willing to carry in order to execute monetary policy?

–          Fitch said that, after basically stabilizing in 2017, the Fed balance sheet will shrink by around $315bn this year and $437bn in 2019 as it allows assets it has been holding to mature

–          Opting to keep the current system would be necessity mean keeping a lot more reserves in the system than under the pre-crisis toolkit, thus limiting the extent to which the Fed shrinks the assets on its balance sheet

–          This so-called floor system, which the Fed currently uses, involves it setting an interest rate on excess bank reserves and another rate on an overnight reverse repurchase facility to steer market rates.

–          The imposition of regulations requiring banks to hold big buffers of high-quality liquid assets, coupled with changes in banks’ preferences, suggest the sector will want to hold prodigious quantities of reserves for the foreseeable future

–          Another option is to go back to a so-called corridor system, like one used before the crisis, in which a relatively scarce quantity of reserves is held by the banks and the central bank conducts frequent interventions to hold official rates close to its target


Answer: (1) Buy off-season; (2) Listen to more music; (3) Maintain your stuff (Prof Note: This also goes for your health.  Repair is generally cheaper than replace.); (4) Learn to say, “No”; (5) Find a hobby; (6) Get enough sleep; (7) Buy refurbished electronics (Prof Note: I will absolutely admit I stay away from refurbished electronics); (8) Play social director (Prof Note: Beers at Buzzys in SoMD are $2.00); (9) Wait 24 hours (Prof Note: Someone told me that when considering purchasing a Porsche, test drive and wait a week.  It takes that long to get the “Porsche Feel” out of your body and head and you can then make a rational decision); (10) Walk more; (11) Travel more; (12) Brown-bag it to work; (13) Eat more veggies; (14) Stretch every morning (Prof Note: What is up with this Yoga craze?!); (15) Live below your means (Prof Note: I cannot stress this enough.  Of course I love McMansions but every expense must have a revenue off-set…rule to live by!); (16) Floss every day (Prof Note: Cost of a tooth removal in Waldorf, MD: $205); (17) Dress up with Craiglist; (18) Get a massage (Prof Note: Look for deals, i.e. $40 or less); (19) Laugh more (Prof Note: No issue if hang’n with me…I truly am hilarious!); (20) Meditate every day; (21) Eat more slowly; (22) Wake up earlier; (23) Gossip more (Prof Note: Whoa…I work hard at not gossiping and work even harder to make every statement positive); (24) Watch less TV (Prof Note: Whoa….I love my tele); (25) Use your credit card less (Prof Note: No, use it more for required purchases..rack up those points); (26) Drive a smaller car; (27) Don’t compare yourself to others (Prof Note: It took me YEARS to achieve this body greatness.  Just love yourself as I love all of you!); (28) Subscribe; (29) Think positive (Prof Note: …and be positive); (30) Plant a garden; (31) Be a good Samaritan; (32) Cherish your friendships; (33) Spend on experiences (Prof Note: But make them experiences worth having, e.g. Gorky Park in the winter!); (34) Volunteer (Prof Note: I have mixed emotions over this.  If you love your job, do your job and donate $$$ for your cause.  It is a more efficient way of being a good Samaritan.  Of course, it is your time so your choice.  Just my opinion.); (35) Spend less on haircuts (Prof Note: I have not had a haircut this year!); (36) Make it yourself; (37) Make a life goals list (Prof Note: Absolutely but ensure the goals are achievable); (38) Read a good novel (Prof Note: I just received new reading glasses.  Oh how I missed reading…I am back at it!); (39) Don’t pay full price; (40) Budget your happiness; (41) Quite the gym; (42) Quit smoking; (43) Use a discount cell service; (44) Entertain more; (45) Spend time with your kids; (46) Trade your books; (47) Use your library; (48) Buy generic; (49) Ask about company benefits; (50) Find free entertainment (Prof Note: Sunsets are free.  There is an adirondack chair on the other side of the fire pit with your name on it for us to watch the sunset over Virginia.  Just like the Price is Right, “Come on down!”  You know where to find me and all are welcome!)


List-serve Responses:


#1 –

Try this:


#2 –

In my limited experience cost segregation is a challenging topic and one that the irs is particularly sensitive. Best practice would probably be to not mess around and engage a specialist such as kpkg. The accelerated deductions than can be achieved could more than offset the cost of service. If anyone does reply with an off the shelf schedule i would be interested in seeing it, but would be cautious to implement without expert review.


Marshall Valuation Service

#4 –

sent to legal team…

For it to stick with the IRS you have to actually have a cost segregation study done – which then yields accelerated and bonus depreciation.   Otherwise it’s audit failure

#5 –

I think, but am not positive, that RS Means costing books also include depreciation. I may have a 3+ year old one I can send you, when I’m in front of my computer. Otherwise, you can order current info from below. Hope this helps.


#6 –


Marshall & Swift – Marshall Valuation Service should have a breakdown for depreciation. A commercial appraiser should be able to assist (the copy I have is not digitized and hasn’t been updated in about eight years). I also wonder if a Cost Segregation expert would be able to help. They specialize in tax savings by formulating depreciation.


#7 –


Just wanted to respond to your comment regarding federal tax depreciation rates for investment properties.  I specialize in fixed asset management for real estate companies with a focus on cost segregation studies (among other ways to take the most taxpayer favorable treatment of your investments).  The IRS recommends specific software that can be utilized to support component values but the tax lives assigned to those assets are from the Internal Revenue Code, Treasury regulations, IRS guidance, and court decisions.  It is always recommended to get assistance from a specialist in this area as the IRS will challenge studies that do not follow the proper methodology.


You can read more at the following:


#8 –


There’s also this: https://www.nachi.org/life-expectancy.htm. NAHB also used to have a similar resource, but it may be behind a pay/membership wall. Latest one that turns up in Google is 2007 (https://www.interstatebrick.com/sites/default/files/library/nahb20study20of20life20expectancy20of20home20components.pdf), which is still probably fine.


#9 –



Here is EVERYTHING you need for this…. review this website, download the spreadsheet (i’ve attached it), utilize the web portal for submission and reports generation… there are 6 training videos.

This was created by KPMG for HUD and embeds all the EULs (estimated useful life) of components of buildings. This is a housing based spreadsheet but you will get the idea. It then allows you to project capital needs into the future of 20 years. If something expires – say a cabinet’s EUL is 10 years, then you use the duration tool to spread it so that you are forecasting replacement around that year – rather than all the cabinets fall off the walls at the precise time… then the financial part of the tool allows you to ‘step’ the interest rates for costs over time projected