It is with great pleasure that the team here at Segregation Holding is pleased to report on one of our latest case studies. Taco Casa, a newly constructed restaurant located in Denton, Texas, was able to save a tremendous amount of money even before they opened their doors. Owner Joey Milner came to us inquiring on how a cost segregation study may be able to help save money as well as lower their income tax burden. Cost segregation is the process of identifying the property components that can be reclassified as personal property or land improvements and then identifying which of those assets will qualify for the accelerated depreciation. Overall, the primary purpose of any cost segregation study would be to identify all assets, including construction related costs that can be depreciated over a much shorter time frame. That time frame is typically 5, 7 or 15 years versus the standard 39 years.
When Taco Casa owner, Joey Milner, first came to us, we were able to show an original benchmark estimate of $31,121 income tax credit for the 2013 year. This included an accelerated depreciation of 15% on all assets that qualified for the 5 year depreciation and 10% on 15 year qualified assets. This estimate left Joey feeling super excited about the process and the savings that this cost segregation study would yield him. However, after we got back to the office and begin the number crunching process, additional savings were discovered.
Our team of professional engineers and analysts delivered actual results of 18.6% 5-year and 29.5% 15-year assets. This meant that the income tax credit for 2013 was actually $46,817. As a result of our study, an additional $50,000 in federal income tax credits for the period of 2013-2017 were realized! Once again our results exceeded our client’s expectations and yielded a savings that were exceptional.
If you have a profitable business and are looking for a way to increase your cash flow and lower your income tax burden, a cost segregation study is the perfect match for you!
Why not contact us today and see how we can help your business using cost segregation.
Contact us at 972-897-8019.