Cost Segregation


Source Advisors




The subject property is a bank that was newly
constructed in 2019 for $2,400,000. The building included four teller windows, bank vault doors, teller windows, and pneumatic tube systems. There were also site improvements such as asphalt paving, landscaping, fencing, sidewalks, site drainage and site lighting.

The building is a one-story, steel frame structure, with exterior travertine panels with a built up roof. Interior finishes include tile flooring, decorative millwork and acoustical ceiling tiles.


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. They 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.


Source Advisors reclassified 10% or $240,000 as 15-year land improvements and 10% or $240,000 as 5-year tangible personal property. The property qualifies for 100% bonus depreciation under the Tax Cuts and Jobs Act.


Percent of reclassified property
Increased Depreciation in 1st year


Increased Depreciation in years 1-5 $420,000
Increased Cash Flow in 1st year $170,000
Increased Cash Flow in years 1-5 $150,000
Net Present Value over 39 years $100,000

*Assuming a 35% tax rate, 6% discount rate, and that the property will be held for 39 years