In the world of distribution centers, having a custom-built facility can lead to some interesting tax situations. See how Source Advisors used Cost Segregation to tap into great tax benefits for a chemical distribution center.
The subject property is a newly constructed 97,000 square foot distribution center. It is situated on 19 acres and was placed-in-service in 2018.
The company is a distributor of chemicals and other products for the commercial landscaping industry. The building has a showroom with offices on the 1st floor and a small mezzanine with typical finishes and equipment connections.
The warehouse also has typical finishes and equipment for this type of facility. In addition, it has a seed cooler room with specialized mechanical equipment and special electrical connections for lighted racking that qualify as personal property.
Land improvements included all concrete paving, fencing, a rail spur, landscaping, and a covered fuel island.
Given the specialized nature of the distribution center, with its unique mechanical equipment and extensive land improvements, the challenge was to precisely identify and categorize the components that could be classified under shorter tax life categories.
The Source Advisors Cost Segregation engineers analyzed the construction costs, in the form of contractor invoices and allocated the cost detail to various trades and building components.
Our engineers conducted detailed estimates from the construction drawings and augmented those findings with additional estimates performed during the site visit of the property. Key property personnel were also interviewed, and a detailed report was delivered, identifying and documenting all of the components that qualify for a shorter tax life.
Don’t leave money on the table. Contact Source Advisors to find out how Cost Segregation can work wonders for your bottom line.
Our industry experience with cost segregation has helped businesses claim billions of dollars in tax credits and incentives.
Our engineers excel at delineating construction costs to yield the highest tax benefits.
Our 40-year history of achieving substantial tax credit savings for clients across various industries is a testament to our commitment and expertise.
Our thorough reporting ensures every qualifying cost is adeptly reclassified.
Our dedicated support team is readily available to guide you through every step of the process, ensuring a smooth and stress-free experience.
Our recommendations stand in full compliance with tax legislations, offering clients unmatched peace of mind.
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