Cost Segregation Example #1

The subject property is comprised of approximately 18,000 finished square feet, consisting of medical office/general office area on two floors. The construction of the property has wooden framed walls with a brick facade and a wood joist roof framing.  The outside of the property includes typical improvements such as lighting, signage, asphalt paving, sidewalks and curbing.

The property was purchased and the buildings constructed in 2004 and 2012 by the current owner and the property has not sold since.  In other words, it has had the same tenant since originally occupied.  Once reviewed, our experts were able to make the following determination:

Original Tax Filing:

39 Year Life – $2,605,000

15 Year Life – $94,000

7 Year Life – $22,000

Total Cost Value – $2,721,000


Revised Tax Filing:

39 Year Life – $2,130,000

15 Year Life – $194,600

7 Year Life – $340,000

5 Year Life – $56,400

Total Cost Value – $2,721,000

Total Net Tax Benefit = $83,000


The final report allowed the tax payer to deduct almost $300,000 more in “catch up” depreciation in one year.