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Cost Segregation Case Study: Newly Constructed Bank

Franklin Chow on October 10, 2023

Case Studies

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.

Property Breakdown

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 Challenges

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.
sales tax compliance

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.

Financial Results

Following this extensive examination, Source Advisors accomplished:

10% or
$240,000

Reclassified as 15-year land improvements

10% or
$240,000

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.

Request a Cost Segregation Proposal

Get Started Today!

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.

Related Case Studies

Cost Segregation Case Study: Office Building

Franklin Chow on October 10, 2023

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.

Request a Cost Segregation Proposal

Get Started Today!

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.

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.

Related Case Studies

Cost Segregation Case Study: Grocery Store

Franklin Chow on October 10, 2023

Case Studies

Cost Segregation for a Grocery Store

A Comprehensive Source Advisors Case Study

Cost Segregation for a Grocery Store

The world of apartment complexes presents diverse challenges for cost segregation. This case study revolves around a vast 18-building garden-style apartment complex, showcasing how Source Advisors transformed the financial landscape of the property’s acquisition.

About the Store

This property is a high end, newly constructed, free-standing grocery store. The construction costs was $18,100,000 and it was placed-in-service in 2017. 

The store is 48,000 square feet and sits on a three-acre site. The building is organized into a main floor for grocery sales with a mezzanine level for administrative functions and classrooms designed for cooking lessons.

The Challenges

Due to the grocery store’s luxurious nature and complex systems, a primary challenge was meticulously identifying and classifying assets for appropriate tax categorizations. 

The store’s specialized sections and intricate systems, such as produce watering and backup power with a large generator, added layers of complexity to the study.

Property Breakdown

The main floor has numerous departments including a butcher’s department, seafood, bakery, wine, produce, floral, etc. Interior finishes consist of vinyl tile, carpet, ceramic tile, and drywall partitions finished with paint. 

The store had significant numbers of cable trays, trenches, produce watering systems, supplemental HVAC, and backup power including a large emergency generator. Site improvements include asphalt paving, brick paving, concrete paving, cart corrals, fencing, and landscaping.

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:

8% or
$1,450,000

identified as 15-year land improvements.

22% or
$3,980,000

marked as 5-year tangible personal property.

The store's results leaned towards the higher end, owing to its opulence and complex systems. And, as this was new construction introduced in 2017, the store qualified for 50% bonus depreciation.

Request a Cost Segregation Proposal

Get Started Today!

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.

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.

Related Case Studies

Cost Segregation Case Study: Distribution Center

Franklin Chow on October 10, 2023

Case Studies

Cost Segregation for a Distribution Center

A Comprehensive Source Advisors Case Study

Cost Segregation for Distribution Centers

In the world of distribution centers, having a custom-built facility can lead to some interesting tax situations. See how Source Advisors used Cost Segregation to tap into great tax benefits for a chemical distribution center.

About the Center

The subject property is a newly constructed 97,000 square foot distribution center. It is situated on 19 acres and was placed-in-service in 2018.

The company is a distributor of chemicals and other products for the commercial landscaping industry. The building has a showroom with offices on the 1st floor and a small mezzanine with typical finishes and equipment connections.