Cost Segregation Case Study For Office Building in Palm Beach, Florida

 $3,949,404.10 in first year tax savings

This office building in Palm Beach, Florida, purchased in 2018 for $14.8 million, was set to generate a first-year depreciation of $224,559. However, instead of using the standard straight-line method, property investors conducted a cost segregation study to increase first-year depreciation to $2,836,209. Our engineers also added a $1,113,194 deduction for repairs and maintenance, bringing the total first-year tax savings to $3,949,404.

Study Type (Office Building – Palm Beach, FL) Class Life Percentage Accelerated Tax
Cost Segregation  5-Year 9.19% $147,381.49
Cost Segregation  15-Year 14.95% $913,846.87
Cost Segregation 39-Year 72.97% $1,774,981.29
Repairs & Maintenance Expense 100% $1,113,194.45
Total 1st Yr Depreciation with Cost Seg and R&M $3,949,404.10
Depreciation 1st Yr without Cost seg  39-Year 0% $224,559.29
Total Difference in depreciation 1st Year and R&M $3,724,844.81
% amounts relate to how much was reallocated from the depreciated basis