This owner purchased the property using a 1031 Tax Exchange and wanted to further enhance income tax savings with a cost segregation analysis.
The purchase price of this building was approximately $56M; due to the 1031 exchange, depreciable basis eligible for a cost segregation study was limited to $18M. Had the client been the original owner of the property, and conducted a first year study, additional benefit could have been provided through Bonus Depreciation, increasing the identified savings to $1,068,840. Due to the significant value of the assets purchased Section 179 was not available. If this property was not a part of a Sec. 1031 Exchange, the eligible savings for this owner would have been $2,960,916.
1st Year Depreciation Increase:
$56,000,000 / Depreciation Basis $18,288,441
Full Life NPV:
Type of Study: