Tax matters related to fitness facilities can be quite complex. This case study reveals how Source Advisors skillfully converted the purchase costs of a contemporary fitness center into notable tax advantages.
The subject property is a 32,000 square foot fitness center that was acquired in 2015 for $2,300,000.
The building is a one-story, steel frame structure, with an elastomeric membrane roof, and with brick and EIFS veneer.
Interior finishes include ceramic tile, rubber flooring, wood flooring, mirrored walls, and paint.
The interior is wired for television and fitness equipment, and is also furnished with a sauna, swimming pool and basketball court. Site improvements include asphalt and concrete pavement, steel railings, and landscaping.
A fitness center, with its blend of standard and specialized components, requires a nuanced approach to cost classification.
Notably, with an indoor swimming pool – while the pool structure might be considered a permanent fixture, its equipment can be classified differently. Ensuring such specifics are addressed correctly is vital to optimizing tax savings.
Source Advisors Cost Segregation engineers were engaged to analyze the acquisition cost. They then applied a cost model to allocate the purchase price to various trades and building components.
Our engineers conducted a thorough inspection of the property where estimates were performed. Key property personnel were also interviewed. A detailed report was delivered, identifying and documenting all 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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