Cost segregation delivers results for Medical Center in Elizabethton, Tennessee.
The owner group of this East Tennessee medical center learned about accelerated depreciation from their CPA, Richard Perry of Knoxville, TN. Richard then recommended a call to Segregation Holding Limited, specialists in cost segregation, to facilitate a free analysis.
Steve Hopland, CEO of Medical Center Rx, met with us to discuss how cost segregation works and how it’s applied to a medical facility such as theirs, especially since it is multi-use. Cost segregation is the application of IRS recommended methodology in reallocating assets from a 39.5-year depreciation class to 15-year (land improvements) and 5-year depreciation (tangible personal property) classes. This $7.8MM facility is a combination of medical offices, physical therapy, chiropractic, pharmaceutical, and Class A office space. Our initial benchmark estimate determined there was approximately 35% of the asset to qualify.
Assets that qualify to be reallocated using cost segregation include, but are not limited to, the following: dedicated electrical & plumbing, carpeting & VCT flooring, cabinetry, security system, cable/internet wiring, asphalt paving, curbs/sidewalks, landscaping, fencing, water collection basin, site lighting, and awnings. These assets fall into either IRC Sec. 1245 or Sec. 1250, depending upon their location and application.
We completed the site survey and prepared the cost segregation study to exceed IRS guidelines. The results of the study gave the owners a 42% reallocation of assets to 5-year and 15-year depreciation schedules. Cost segregation delivered over $1.3MM in additional depreciation for 2012!
Again, cost segregation delivers results every time we apply it!
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