Source Advisors
October 10, 2023
The subject is an existing multi-family apartment community that was originally placed in service in 2022. The owner incurred $2,755,180 in renovation costs in 2023 for unit renovation and updates to common areas.
Source Advisors identified expenditures that met the requirements under the Tangible Property Regulations (TPR) to be treated as deductible expenses. Expenditures deemed an improvement per the final regulations were assigned to the proper MACRS (Modified Accelerated Cost Recovery) recovery periods, with several assets eligible for Bonus Depreciation. These determinations were made by reviewing cost details, construction drawings, and from interviews with the property owner, and their knowledgeable representative. Additionally, assets originally placed in service that were partially or completely removed during the renovation were identified as dispositions. A detailed deliverable documenting all findings was provided to the client and their tax advisor for proper implementation during the preparation of the tax returns.
Source Advisors reclassified 5% or $128,906 as 15-year land improvements, 33% or $915,306 as 5-year tangible personal property, and 31% or $863,177 as deductible expense. Property with a depreciable life of less than 20 years qualified for 80% bonus depreciation under the Tax Cuts and Jobs Act. Additionally, Source identified the original assets that were removed and disposed of from the property, which resulted in the write-off of $851,963.
Through detailed Cost Segregation analysis, Source Advisors turned complex construction costs into massive tax savings for the auto dealership.
Don’t leave money on the table. Contact Source Advisors to find out how Cost Segregation can work wonders for your auto dealership’s 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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