Cost Segregation for Banks
A Comprehensive Source Advisors Case Study
Cost Segregation for Banks
The taxation realm for banking institutions can be intricate, offering both challenges and avenues for savings. This case study showcases how Source Advisors harnessed Cost Segregation to metamorphose the bank’s construction costs into notable tax advantages.
About the Bank
Our focal point is a bank, constructed in 2019 at a cost of $2,400,000. The one-story, steel-framed structure featured exterior travertine panels and a built-up roof. Inside, it was equipped with four teller windows, bank vault doors, pneumatic tube systems, tile flooring, decorative millwork, and acoustical ceiling tiles.
Key enhancements to the site encompassed asphalt paving, landscaping, fencing, sidewalks, site drainage, and lighting, adding layers of functionality and aesthetics to the bank’s premise.
The unique features of the bank, such as its vault doors, teller windows, and pneumatic tube systems, required specific understanding and knowledge for accurate cost classification. Additionally, the blend of site improvements and diverse interior finishes necessitated a nuanced approach to ensure no expense detail was overlooked or misclassified.
The primary objective was to accurately and legally optimize tax savings without compromising on compliance or missing out on potential benefits.
The Source Advisors Solution
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.
Following this extensive examination, Source Advisors accomplished:
Reclassified as 15-year land improvements
Reclassified as 5-year tangible personal property
Owing to these astute reclassifications, the bank can leverage 100% bonus depreciation as per the Tax Cuts and Jobs Act.
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By employing an in-depth Cost Segregation analysis, Source Advisors successfully translated the bank’s complex construction expenditures into significant tax reductions.
Don’t leave money on the table. Contact Source Advisors to find out how Cost Segregation can work wonders for your banks 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.
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.