Without a Cost Segregation study, a $392,000 Apartment Building in Hillsborough, NH, purchased in 2019 would have generated a 1st year depreciation of $8,469.14. By applying a cost segregation study, the property investors accelerate depreciation, for the 1st year to $85,343.19. This acceleration in deprecation allows the property investors to reduce their tax liability and in turn increase their bottom line. By breaking down the building asset into components, a cost segregation also aids in future benefits of abandonment, repairs, routine maintenance and overall asset management. ETS performs hundreds of cost segregation studies monthly for property owners, providing a detailed engineering review of assets including special purpose mechanical and electrical systems, decorative finishes, site improvements, and any process related to special purpose construction.
$76,874.05 in 1st year Tax Savings Purchase
Study Type | Class Life | % Re-Classed | Accelerated Tax 1st Yr. |
Cost Segregation | 5-Year | 17.02% | $9,089.97 |
Cost Segregation | 15-Year | 2.43% | $9,515.89 |
Cost Segregation | 27.5-Year | 80.55% | $66,727.33 |
Total 1st Yr Depreciation with Cost Seg | $85,343.19 | ||
Depreciation 1st Year without Cost Seg. | 27.5-Year | 100% | $8,469.14 |
Total Difference in Depreciation 1st Year | $76,874.05 |