This client owns multiple properties and is focused primarily on transportation and commercial real estate investment. Before the purchase of any property, this client consults to understand the opportunities cost segregation will create.
Our involvement with this facility began during construction. This 40,000 sq. ft. heavy truck maintenance facility allows for ten 55’ trailers to be stored inside with all doors closed. The building has significant land improvements which are eligible for accelerated depreciation such as concrete aprons, chain link fencing, and extensive semi-grade asphalt. The improvements also include substantial storm water handling capability plus grease traps and other required environmental features. The facility includes administrative offices for 50 persons. This property owner did not utilize either Section 179 or Bonus Depreciation, which would have greatly enhanced study value.
One misconception about cost segregation is that it only serves buildings with high interior finish. Light industrial, distribution and warehouse buildings are great candidates for cost segregation however. These buildings can have a great deal of eligible short life items, whether due to extensive truck bays, paving, electrical, HVAC, plumbing, or land improvements.
This building did not take advantage of either Bonus or Section 179 depreciation, as the rules governing these opportunities were not available to this property during the placed in service year. Today, a similar building would achieve over $2.1M in additional first year depreciation.
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