Cost Segregation Analysis for a Self-Storage Facility in La Pine, Oregon

Narrative

In 2019, the owners of a self-storage facility in La Pine, Oregon engaged Engineered Tax Services (ETS) to perform a cost segregation study. The property consists of 6 single-story buildings originally constructed in 1975. The facility features metal construction with various improvements including security features, paving, and storage unit components.

Objective

The primary objective of the cost segregation study was to identify and classify the farm's assets to optimize the owners' tax savings. By breaking down and reallocating components into shorter depreciation life categories, ETS aimed to provide both immediate and long-term financial benefits through accelerated depreciation.

Methodology

ETS employed a detailed, engineering-based approach, which included:

1. Physical Inspection: conducting a thorough site visit to identify and photograph the property's components
2. Document Review: examining architectural plans, construction documents and accounting records
3. Cost Analysis: applying engineering principles to allocate costs to specific asset classifications
4. Depreciation Calculation: calculating depreciation using IRS-accepted methods such as the Modified Accelerated Cost Recovery System (MACRS)

Asset Allocation