Projects

Recreation

Golf Club

Engagement Overview:

Bedford was engaged by the owners of a golf club to conduct a cost segregation study. 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:

The club consists of an 18-hole golf course, a 14,050 square foot clubhouse, a 12,400 square foot maintenance building, a pump hose for the fire depression system and a pre-engineered building for the irrigation pumping equipment and fertilizer tanks. The 441 acre site is comprised of six lots straddling two town lines. The property was placed in service in September 2004 and has a total cost basis of $ 9,987,854.

Engineering Process:

Our engineers examined all the design and construction documents, contractor payment requisitions and other related data to determine the cost basis for every component of the building. Next, our engineer conducted an on-site study to identify, measure, quantify and photograph the existence of all assets eligible for accelerated depreciation. Finally, our team (on-site engineer, senior engineer, and tax specialist) reviewed the cost segregation study and certified its completeness and accuracy.

Estimate of Benefits & Savings:

The pre-engagement estimate we provided to the client showed a potential reallocation of $3,300,000 or 33% to shorter depreciable lives. The projected tax benefit was $730,520 in NPV savings over the next 10 years with $330,993 in tax savings available for the current tax year.

Results:

The cost segregation study reallocated $5,159,637 or 51.6% of the assets to shorter recovery periods. As a result, the property owner’s tax savings is projected to be $913,188 in NPV savings over the next 10 years with $356,278 in tax savings available for the current tax year.