| Asset Class | Asset Life | Original Allocations | Allocation After CSS | ||
|---|---|---|---|---|---|
| $ | % | $ | % | ||
|
Personal Property |
5 yr 200% db | - | 0% | $300,000 |
10% |
|
Personal Property |
7 yr 200% db | - | 0% | - |
0% |
|
Land Improvements |
15 yr 150% db | - | 0% | $450,000 |
15% |
|
Real Property |
39 yr sl | $3,000,000 | 100% | $2,250,000 |
75% |
| Totals | $3,000,000 | 100% | $3,000,000 |
100% |
|
|
|
|
|
Year of Study |
Year |
Depreciation Before CSS |
Depreciation After CSS |
Change In Depreciation |
Tax Savings (Expense) |
Cumulative Discount Factor |
NPV of Taxes Deferred |
|
1-5 |
1995 |
41,730 76,920 76,920 76,920 |
113,798 |
72,068 |
- | - | - |
| 272,490 | 590,903 | 318,413 | - | - | - | ||
|
1999-2003 |
384,600 384,600 1,958,310 |
- |
413,018 |
192,466 |
4.3121 |
173,779 |
|
| 3,000,000 |
3,000,000 |
- | - | - | 144,076 | ||
| Office Complex | |||
| This project cost $4,500,000 and was acquired in 1992. It was built in the early 1980's. The cost segregation study enabled the taxpayer to claim additional depreciation deductions of $428,000 over the next four tax years. | |||
| Nursing Home | |||
| This full care nursing facility, built in 1992 at a cost of $2,000,000 was entitled to additional depreciation over $300,000 over the following four years. The present value of the income tax deferral at 9% is approximately $90,000. | |||
| Apartment Complex | |||
| The client built three apartment complexes in the mid 1990's at a total cost of approximately $9,000,000. Our study identified sufficient 7 and 15 year property to generate additional depreciation deductions in excess of $830,000 in the four years following the study. | |||
| On the average, for every $100,000 of 39 year property reclassified to 7 year property, the present value of the net cash flow at 8% associated with the acceleration of depreciation is approximately $20,000. In addition, a dollar invested today at 8 % will be worth $20 in forty years. | |||
| Click here for Cost Segregation Studies for years 1988, 1995 and 2000. | |||
