Project Overview
Property Type: Multifamily Apartments
Location: Red Oak, Texas
Total Depreciable Basis: $52,008,500
A multifamily apartment owner in Red Oak, Texas engaged Engineered Tax Services (ETS) to perform a comprehensive engineering-based Cost Segregation Study on a newly acquired apartment community with a depreciable basis exceeding $52 million.
Through our detailed engineering analysis, ETS identified millions of dollars in assets eligible for accelerated depreciation, allowing the owner to significantly improve cash flow while maintaining full IRS compliance.
The Opportunity
Apartment communities contain numerous assets that qualify for shorter depreciation lives than the building itself. Without a professional engineering-based study, these components often remain depreciated over 27.5 years, delaying valuable tax deductions.
The property included numerous qualifying assets such as:
- Parking lots and concrete paving
- Sidewalks and curbs
- Landscaping
- Site lighting
- Pool facilities
- Fencing
- Monument signage
- Storm drainage systems
- Gates and access controls
- Other site improvements
ETS performed a detailed site inspection and engineering analysis to properly classify each asset according to IRS guidelines.
Engineering-Based Analysis
Unlike firms that rely on estimates or percentage allocations, ETS conducted a comprehensive engineering study that included:
- On-site inspection of the property
- Engineering quantity takeoffs
- Review of construction costs and supporting documentation
- Allocation of direct and indirect construction costs
- Asset-by-asset classification
- IRS-compliant depreciation schedules
- Detailed documentation designed to withstand IRS examination
Every qualifying asset was individually analyzed and documented using established engineering methodologies.
Results
Through the Cost Segregation Study, ETS successfully identified substantial assets eligible for accelerated depreciation, including significant allocations to:
- 5-Year Personal Property
- 15-Year Land Improvements
- Remaining structural components depreciated over 27.5 years
This engineering approach allows the property owner to:
- Accelerate depreciation deductions
- Improve after-tax cash flow
- Increase available capital for future investments
- Maximize available bonus depreciation (where applicable)
- Receive a fully documented, IRS-defensible engineering report
Why Engineering Matters
Many providers estimate allocations using industry averages. ETS takes a different approach.
As one of the nation’s only licensed engineering firms specializing in Cost Segregation, our reports are developed by engineers, tax professionals, and construction experts who perform a detailed analysis of every qualifying component.
This engineering-first methodology provides:
- Greater accuracy
- Maximum allowable tax benefits
- Comprehensive documentation
- Strong audit defense
- Long-term confidence in your depreciation strategy
Ready to Maximize Your Apartment Investment?
Whether you own a newly constructed apartment community or an existing multifamily property, an engineering-based Cost Segregation Study can unlock substantial tax savings and improve your property’s cash flow.
Contact Engineered Tax Services today to learn how much accelerated depreciation your property may qualify for.
