We thought this would be a good time to show you a few real life examples of savings that are available by incorporating the concepts we've introduced in previous newsletters.
Below you will find four case studies including a day care facility, automotive dealership, hotel and office/warehouse flex building. These are some of the more common property types selected for cost segregation studies, but almost all property types generate significant savings.
Tax savings can still be realized for 2008 tax returns that are on extension but time is running out so don't delay. 2009 projects should be completed now to reduce or eliminate estimated tax payments.
Call or submit a proposal request today for a complimentary feasibility analysis showing your Net Present Value tax savings for properties constructed or acquired in 2009 or before. You will not be disappointed! |
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Day Care Facility - NPV Tax Savings: $211,200
 This day care facility located in Texas was constructed in March 2003 for $2,871,000. The engineering based cost segregation study allowed the reclassification of approximately 33.5% of the construction costs into shorter recovery periods. This property also qualified for 30% Bonus Depreciation.
5/7-Year Personal Property: $280,000
15-Year Land Improvements: $680,000
This resulted in:
 Additional depreciation of $546,300 for the 2008 tax return
Tax savings of $223,100 for the 2008 tax return
Net Present Value (NPV) tax savings of $211,200
This property received a large first year tax savings from a catch-up adjustment due to the retroactive nature of the study. The automatic change in method of accounting required filing Form 3115 (prepared by CRS) but did not require amended returns or prior IRS approval.
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Auto Dealership - NPV Tax Savings: $495,400
 This automotive dealership located in Massachusetts was acquired in April 2008 for $6,865,000 (excluding land). The engineering based cost segregation study allowed the reclassification of approximately 38.3% of the building basis into shorter recovery periods.
5/7-Year Personal Property: $758,000
15-Year Land Improvements: $1,871,000
This resulted in: Additional depreciation of $1,099,000 over the first five years Tax savings of $449,000 over the first five years Net Present Value (NPV) tax savings of $495,400 |
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Hotel - NPV Tax Savings: $701,100
 This hotel located in Florida was constructed in February 2008 for $10,626,000. The engineering based cost segregation study allowed the reclassification of approximately 32% of the construction costs into shorter recovery periods.
5/7-Year Personal Property: $1,750,000
15-Year Land Improvements: $1,650,000
This resulted in:
Additional depreciation of $1,846,000 over the first five years
Tax savings of $753,700 over the first five years
Net Present Value (NPV) tax savings of $701,100
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Flex Building - NPV Tax Savings: $344,900
 This office/warehouse flex building located in California was acquired in January 2004 for $7,582,000 (excluding land). The engineering based cost segregation study allowed the reclassification of approximately 22.7% of the building basis into shorter recovery periods.
5/7-Year Personal Property: $385,000 15-Year Land Improvements: $1,333,000 This resulted in: Additional depreciation of $646,600 for the 2008 tax return Tax savings of $264,000 for the 2008 tax return Net Present Value (NPV) tax savings of $344,900 This property received a large first year tax savings from a catch-up adjustment due to the retroactive nature of the study. The automatic change in method of accounting required filing Form 3115 (prepared by CRS) but did not require amended returns or prior IRS approval. | |
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Cost Recovery Solutions, LLC
www.crscostseg.com
407 Main Street
Metuchen, NJ 08840
P: (732) 548-3855
F: (732) 549-8844
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