Strip center saves $360,000 with cost segregation study applied!
Our case study of the week is a retail strip center located in Gordonsville, TN. SHL was contacted by an investor group who had recently purchased a strip center. The investment group was looking for a way to lower their income tax burden while increasing their cash flow. A cost segregation study will identify all assets, both tangible personal property as well as land improvements, which qualify for accelerated depreciation. Once these assets are clearly identified, the team at Segregation Holding will begin the engineering process to maximum the savings our client can receive.
Our process for the retail strip center started with the engineer examining all the design and construction documents as well as contractor payments and other related data. This is done prior to us arriving on site. This gives our team the chance to review all documents to determine if additional information is needed prior to arrival. After the documents are reviewed, the project engineer conducts an on-site inspection to identify all eligible assets. We photograph all assets and are “on-site” about an hour. This includes all site measurements and survey as well.
Our original benchmark estimate for this investor group showed a potential reallocation of assets worth $535,039. Quite a substantial savings for sure. The projected tax benefit was over $225,000 in the first year alone. However, when our engineer got back to the office and began the process of number crunching we found even more savings for the investors. The cost segregation results showed a total of $860,563 in accelerated depreciation! This was achieved by the reallocation of assets to 5 and 15 years instead of the standard 39 years. As a result, the investor group will save $361,205 in the current tax year.
Once again, the results achieved by Segregation Holding far exceeded our clients’ expectations. Needless to say our client was very happy with these results.
Isn’t it time that you had your cost segregation study done? If your business is profitable and you own or lease your facility, we can help. We even offer a guarantee. So, go ahead and get your free estimate today!
Contact us at 972-897-8019 or 443-Cost-Seg.