Projects

Automotive

Toyota Dealership

Engagement Overview:

Bedford was engaged by a 90+ person CPA firm to conduct a cost segregation study for one of their clients. The objective of the study was to identify assets that could be moved to shorter recovery periods in order to accelerate depreciation and defer taxes.

Property Overview:

The property underwent a showroom renovations project which was completed in July 2003. The cost basis of $1,429,930 is limited in scope to those costs related to the renovation project.

Engineering Process:

Our engineers examined all the design and construction documents, contractor payment requisitions and other related data to determine the cost basis for every component of the building. Next, our engineer conducted an on-site study to identify, measure, quantify and photograph the existence of all assets eligible for accelerated depreciation. Finally, our team (on-site engineer, senior engineer and tax specialist) reviewed the cost segregation study and certified its completeness and accuracy.

Estimate of Benefits & Savings:

The pre-engagement estimate we provided to the firm and client showed a potential reallocation of $428,979 or 30% to shorter depreciable lives. The projected tax benefit was $90,883 in NPV savings over the next 10 years with $70,046 in tax savings available for the current tax year.

Results:

The cost segregation study reallocated $547,593 or 38.3% of the assets to shorter recovery periods. As a result, the property owner’s tax savings is projected to be $146,075 in NPV savings over the next 10 years with $182,141 in tax savings available for the current tax year.