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174 Update – Notice 2024-12 & Rev Proc 2024-9

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174 UPDATE – NOTICE 2024-12 & REV PROC 2024-9 On December 22nd, 2023, the Service released both Notice 2024-12 and

A CPA’s Basic Guide to SALT Requirements

Benjamin Kluwgant January 22, 2024

State and local taxes affect every business in Illinois in one way or another. To ensure their clients remain tax

LIFO vs. FIFO: Choosing the Right Inventory Identification Method

Karen Koch, CPA, MT March 4, 2024

Inventory identification is a crucial aspect of managing a company’s finances. It impacts your cost of goods sold (COGS), profitability,

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Case Studies

Cost Segregation for a Multi-Tenant Office Building

A Comprehensive Source Advisors Case Study

Cost Segregation for an Office Building

Office buildings present unique tax opportunities, especially when considering multi-tenant facilities. See how Source Advisors optimized Cost Segregation to unveil remarkable tax benefits for a contemporary office complex.

About the Office

This office is a two building, 80,000 square foot complex with a small cafeteria for the tenants. The property was acquired for $6,700,000, placed-in-service in 2019 and sits on a 6 acre site.

The Challenges

A primary challenge was discerning and categorizing the various custom installations specific to each tenant’s requirements. The blending of commercial-grade finishes with tenant-specific elements demanded a meticulous breakdown for accurate tax life categorization.

Property Breakdown

The site was improved with ample parking, a monument sign and attractive landscaping. The buildings are four-story, steel frame structures, with a glass curtain wall and built-up membrane roofs. Interior finishes such as carpeting, vinyl flooring, painted drywall are commercial grade and the electrical, plumbing, HVAC and millwork are custom to each tenant’s needs.

The Source Advisors Solution

Source Advisors Cost Segregation engineers were engaged to analyze the actual 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. A detailed report was delivered, identifying and documenting all of the components that qualify for a shorter tax life.

Financial Results

Following this extensive examination, Source Advisors accomplished:

10% or
$670,000

was identified as 15-year land improvements.

15% or
$1,005,000

was categorized as 5-year tangible personal property.

The results were found to be in line with the norm for a Class A office building catering to a blend of professional service tenants.

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Yes

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Don’t leave money on the table. Contact Source Advisors to find out how Cost Segregation can work wonders for your bottom line.

Discover the Source Advisors Difference

Our industry experience with cost segregation has helped businesses claim billions of dollars in tax credits and incentives.

Expert Analysis

Our engineers excel at delineating construction costs to yield the highest tax benefits.

Proven Track Record

Our 40-year history of achieving substantial tax credit savings for clients across various industries is a testament to our commitment and expertise.

Precision

Our thorough reporting ensures every qualifying cost is adeptly reclassified.

Seamless Client Experience

Our dedicated support team is readily available to guide you through every step of the process, ensuring a smooth and stress-free experience.

Legally Robust

Our recommendations stand in full compliance with tax legislations, offering clients unmatched peace of mind.