Projects
Retail
Drug Store
Engagement Overview:
Bedford was engaged by a 14-person CPA firm to conduct a cost segregation study for one of their key clients. The objective was to identify assets that could be moved to a shorter depreciation schedule and save the client taxes.
Property Overview:
This retail drug store was completed in June 1997 with a total development cost of $989,000. The building occupies a site of 59,000 square feet with total retail space of approximately 10,100 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 and document the existence of all assets that qualify 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 showed a potential reallocation of $325,000 to shorter depreciable lives.
Results:
Our study resulted in $379,200 or 38.3% of the assets being moved to shorter depreciable lives. As a result, the property owner saved $79,000 in taxes for the current tax year.