67% of Assets Reallocated to Shorter Life Resulting in $461,354 Cash Benefit in Year One
Leasehold Improvements for Build-Out of Surgery Center in Florida
Building owners who engage in demolitions and renovations without considering partial dispositions of assets are making an expensive mistake.A typical long-term hold property owner has the opportunity to retire 30% or more of a building’s component costs over the life of the property. Why pay taxes on assets that don’t exist? By removing disposed building components, you reduce your tax basis by reducing the property’s book value.
Our construction engineers performed an exhaustive analysis of all available construction drawings and specifications, contractor payment applications, invoices, and other supporting documentation. We prepared a detailed analysis of all accumulated data on a property unit basis for cost allocation purposes within the
provisions of the Internal Revenue Code. We subsequently completed an on-site inspection to verify, photograph, and document the property. Finally, our internal audit team of senior construction engineers and tax specialists reviewed and certified its completeness and accuracy.
Project Results
Due to this Engineering-based Cost Segregation Study the client was able to reallocate 67% of assets or $1,139,000 to a shorter 5 year life amounting to first year cash benefits of $461,354.