Projects

Hospitality

Limited Service

Engagement Overview:

Bedford was engaged by the owner of a Best Western hotel to conduct a cost segregation study on their facility. The objective was to identify assets that could be moved to a shorter depreciation schedule and save the client taxes.

Property Overview:

This 4-story hotel facility and conference center was awarded the national award of “Best of the Best” by the Best Western Chain. The property possesses extensive upgrades and high end amenities. The property was completed in 1998 and has a cost basis of $7,520,418.

Engineering Process:Limited Service

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 $1,419,519 or 23% to shorter depreciable lives. The projected tax benefit was $253,828 in NPV savings over the next 10 years with $130,009 in tax savings available for the current tax year.

Results:

The cost segregation study reallocated 2,925,443 or 38.9% of the assets to shorter recovery periods. As a result, the property owner’s tax savings is projected to be $598,657 in NPV savings over the next 10 years with $570,359 in tax savings available for the current tax year.

Owner's Comment:M

“The outcome of Bedford’s work was fabulous, way beyond my expectations. I always thought that my CPA was aggressive with our depreciation, yet, even they were impressed. Our CPA firm said that the scope, accuracy and detail of the study was excellent.”

“Bedford’s people are very professional, knowledgeable, courteous – 1st class. They provided a quality result at a great value.”