Purchased in 2017 for $22.7 million, this parking garage in Fort Worth, Texas was on track to generate a first-year depreciation value of $121,388. Instead of taking the straight-line depreciation rate, property investors applied a cost segregation study, which accelerated first-year depreciation to $1,109,975. This resulted in a tax savings of $988,586.
| Study Type (Parking Garage – Fort Worth, Texas) | Class Life | Percentage | Accelerated Tax |
| Cost Segregation | 5-Year | 2.69% | $366,472.91 |
| Cost Segregation | 15-Year | 2.57% | $306,474.80 |
| Cost Segregation | 39-Year | 94.74% | $437,027.47 |
| Total 1st Yr Depreciation with Cost Seg | $1,109,975.18 | ||
| Depreciation 1st Yr without Cost seg | 39-Year | 0% | $121,388.37 |
| Total Difference in depreciation 1st Year | $988,586.81 | ||
% amounts relate to how much was reallocated from the depreciated basis Cost Segregation is based on a 40% tax bracket for federal and State Taxes and performed on the ADR Asset Depreciation Range. Financial benefits are realized by maximizing net present value through deferring tax payments and using increased cash flow to strengthen your portfolio or scale your business. The tables above identify the difference between a cost segregation study and traditional 39.5-year capitalization. The line graph (if shown) demonstrates the impact of investment cash. | |||
