Projects

Automotive

Chevrolet Dealership

Engagement Overview:

Bedford was engaged by a 75+ person CPA firm to conduct a cost segregation study for one of their key clients. The objective of the study was to identify assets that could be moved to shorter recovery periods in order to accelerate depreciation and defer taxes.

Property Overview:

This auto dealership facility was completed in January 2002 for a total development cost of $2,245,000. The building occupies a site on 6.5 acres with total interior space of approximately 12,900 square feet.

Engineering Process:

Our engineers examined all design and construction documents, contractor payment requisitions and other related data to determine the cost basis for every component in the building. Next, our engineer conducted an on-site study to identify, measure, quantify and photograph all assets eligible for accelerated depreciation. Further, our team (site engineer, costing engineer and tax specialist) identified assets eligible for 30% Bonus Depreciation.

Estimate of Benefits & Savings:

Our pre-engagement estimate provided to the CPA & client provided a potential reallocation of $585,000 to shorter depreciable lives.

Results:

Our study resulted in $1,439,000 or 64.1% of the assets being moved to a shorter depreciable life. As a result, the property owner saved $250,000 in taxes for the next tax year ($348,000 Net Present Valued over the next 10 years). Note: 64% reallocation is extraordinary.