Cost Segregation Case Studies

Not all studies are created equal.
Review the case studies below to see how we helped real companies
save real money through our expert cost segregation efforts.

108 unit; 125,000 square feet
Cost Reclassified 35.72%
Year 1 Increased Depreciation $668,883

Cost Segregation Authority was engaged to rush a study on this class B apartment property located in Lansing, Illinois in order to capitalize on benefits of accelerated depreciation prior to its sale less than 3 weeks later.

The property is a 108-unit residential apartment complex featuring 1 and 2 bedroom units sitting on 4.68 acres. We were able to reclassify the following percentages of each asset class:

5-year                                       27.24%
7-year                                        less than 1%
15-year                                      8.97%
Total reclassified                   36.72%

Since it was purchased in 2011, the owners were able to submit a 481(a) catchup depreciation amount of $531,158 plus an additional $156,778 for their current year tax return prior to the sale. Even with recapture tax a year later, the savings was substantial.

4-story, 106,000 square feet
Cost Reclassified 31.03%
Year 1 Increased Depreciation $1,839,696

Cost Segregation Authority was engaged to perform a study on 2 of this Fortune 500’s new office buildings located in Los Gatos, California in 2017.

The subject property is a 105,333 square foot Class A office building sitting on 4.65 acres. For each of the buildings we were able to reclassify the following percentages of each asset class:

5-year                                        13.06%
7-year                                         less than 1%
15-year                                       17.26%
Total reclassified                     31.03%

With the finish quality and size of this project, the client was able to increase their operational cash flow by accelerating the depreciation of several million dollars. The fun part about this cost segregation study was counting the over 58,000 trees and bushes throughout the property. Ha!

108-room, 20,000 square feet
Cost Reclassified 42.93%
Year 1 Increased Depreciation $14,915,468

It’s not hard to get our engineers to travel to certain locations for site visits and Sun Valley is at the top of everyone’s list. We were engaged to perform a cost segregation study on the great remodel and new spa at Sun Valley lodge.  The results:

5-year                                        34.90%
7-year                                         2.57%
15-year                                       5.46%
Total reclassified                     42.93%

The numbers above speak for themselves and yes, we substantially increased their 2015 depreciation deduction. All that needs to be said about this experience is if you haven’t stayed at the lodge in Sun Valley, start planning your trip today. The memories of that resort and that town will stay with you forever.

2-story, 3,736 square feet
Cost Reclassified 40.76%
Year 1 Increased Depreciation $97,533

Few investors and even CPAs understand that cost segregation benefits can apply to all income-producing investments, including single family rental homes, or in this case a low-cost fourplex. Cost Segregation Authority was engaged to perform a study on this property located in Provo, Utah in 2017 and the results were incredible.

5-year                                        25.60%
15-year                                       15.16%
Total reclassified                     40.76%

For an entry-level investor, this unexpected benefit meant the world as they used the savings to invest in another fourplex to be completed in 2018. You can be sure we will do a study on that property next year.

12-tenant strip mall
Cost Reclassified 40.33%
Year 1 Increased Depreciation $210,938

In 2016, Cost Segregation Authority was engaged to perform a study on this 12-tenant strip mall in Centerville, Ohio.

For each of the buildings we were able to reclassify the following percentages of each asset class:

5-year                                        14.77%
7-year                                         less than 1%
15-year                                       24.69%
Total reclassified                     40.33%

With 12 different tenants and spaces, this study required some extra work, but well worth it. The investor was able to improve his 2016 cash flow by nearly $100,000 just with this cost segregation study.

5 acre, 88,900 square feet
Cost Reclassified 37.25%
Year 1 Increased Depreciation $757,653

In 2015, Cost Segregation Authority was engaged to perform a cost segregation study on this 88,900-square foot, state-of-the art manufacturing facility in Bluffdale, Utah. The complexity and quality of their fully integrated process would be difficult to describe, which is likely why their spas are in such high demand.

5-year                                        1.9%
7-year                                         13.55%
15-year                                       21.80%
Total reclassified                     37.25%

No company or individual should pay taxes before they have to. It just doesn’t make “cents”. This company is no different and having their acquisition and improvement costs segregated by our qualified cost engineers they deferred over $330,000 in taxes for 2015. That savings will help sustain a lot of good manufacturing jobs.

208 unit, 29,250 square feet
Cost Reclassified 41.89%
Year 1 Increased Depreciation $294,642

This 2015 cost segregation study for a local storage company was part of 5 sites that the owners have been acquiring over the years. With catch up depreciation, the results were spectacular. On this single property alone we reclassified the following:

5-year                                        11.75%
7-year                                         less than 1%
15-yea                                     29.73%
Total reclassified                     41.89%

Although the 5-year assets in a storage facility aren’t as plentiful as an apartment building, the catchup on this project made it well worth the fee. The owners were able to increase their depreciation deduction by $294,642.

1-story, 79,069 square feet
Cost Reclassified 69.46%
Year 1 Increased Depreciation $221,712

Every once in a while, we get to work on unique and fun projects like this distillery located in the heart of the Rocky Mountains, near Park City, Utah. Here is what we found:

5-year                                        less than 1%
7-year                                         67.63%
15-year                                       less than 1%
Total reclassified                     69.46%

A unique operation yielded unique results, and saved the owners over $97,553 in actual taxes for 2016. That kind of cash buys a lot of rye!

Wendy’s fast food restaurant, 3,266 square feet
Cost Reclassified 38.01%
Year 1 Increased Depreciation $291,841

With over 150,000 fast food restaurants in the U.S., we’ve studied our fair share and this new Wendy’s in Battle Ground, Washington was just as fun as the first.  Like retail, restaurants also have their own category of depreciation called Qualified Restaurant Property. Here is what we found:

5-year                                        26.45%
7-year                                         less than 1%
15-year                                       11.57%
Total reclassified                     38.01%

Restaurants are always a treat to study because the results are so strong and owners are pleasantly surprised. Our cost segregation study on this single fast food property, even without catch-up depreciation, allowed the owner to take an additional $68,611 in depreciation in 2016.