3 Plex Apartment

Cost Segregation Study Findings

This case study features a 3 Plex Apartment acquired in 2019 for $672,700 excluding land. The engineering-based cost segregation final report was applied in 2019 utilizing a 37% tax rate and an 8% present value ROI.

With 100% bonus depreciation (permanent through the BBB) the owners exercised the federal tax law of the accelerated depreciation method creating a significant cash flow opportunity.

The engineering-based cost segregation final report found assets that qualified under a reclassification of 1250 real property to an accelerated 1245 personal property. The building allocation shows the 1245 personal property $131,230 for the interior 5 years, $3,532 for the 15 years exterior components, and $537,038 for the 1250 structural 39 years. This result led to a significant tax savings of $46,737 in the first year with the inclusion of the 100% bonus depreciation. The final engineering-based cost segregation report’s results showcase when applied past the first year with tax savings of $35,412 over 10 years. When reinvesting the savings grew to $214,969 over a given time. The engineering-based cost segregation method proves again what clients have called a “No Brainer” for commercial property owners.