Property Overview
Property Type: Pre-School Facility
Location: Wesley Chapel, FL
Year Acquired: 2023
Year Built: 2006
Building Size: 10,091 sq ft
Total Depreciable Basis: $3,020,340.93
Placed in Service: September 15, 2023
Pre-School Study on a $3,020,34…
Key Results
Asset Reclassification
| Asset Class | Allocation | % of Property |
|---|---|---|
| 5-Year Property | $497,915 | 16.49% |
| 15-Year Property | $680,522 | 22.53% |
| 39-Year Property | $1,841,904 | 60.98% |
Total accelerated property (5-year + 15-year): $1,178,437
39.02% of the entire property was reclassified to shorter depreciation lives.
Immediate Tax Impact
Immediate Tax Benefit
$1,052,685
Projected 5-Year Tax Benefit
$1,352,903
These benefits come from accelerating depreciation on nearly $1.18M of the property basis that would otherwise depreciate over 39 years.
Depreciation Impact
Before Cost Segregation
Standard straight-line depreciation over 39 years.
After Cost Segregation
$497,915 depreciated over 5 years
$680,522 depreciated over 15 years
This front-loads deductions and dramatically increases early-year tax write-offs.
The depreciation comparison chart on page 2 of the report shows the large increase in first-year depreciation once the assets are properly classified.
Examples of Accelerated Assets Identified
The engineering study identified numerous building components eligible for shorter recovery periods, including:
5-Year Assets
Security systems
Dedicated electrical outlets
Kitchen equipment
Appliances
Specialty flooring
Certain electrical systems
15-Year Land Improvements
Playground equipment
Concrete sidewalks
Asphalt paving
Landscaping
Site drainage
Fencing
These assets are commonly grouped into the building structure but qualify for faster depreciation when analyzed through an engineering-based study.
Financial Takeaway
Property Basis:
$3,020,340
Accelerated Basis Identified:
$1,178,437
Immediate Tax Benefit:
$1,052,685
Projected 5-Year Benefit:
$1,352,903
Nearly 40% of the building’s cost basis was moved into accelerated depreciation categories, generating over $1M in immediate tax savings.
