Cost Segregation Study of a Fast Food Restaurant

$1,678,696.08 in Total Realized Tax Savings

By applying cost segregation, property investors accelerate depreciation, reduce tax liability and increase their bottom line. This aids in future benefits via abandonment, repairs, routine maintenance and overall asset management. ETS performs hundreds of cost segregation studies on a monthly basis 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.

Study Details: The 5-year accelerated deprecation percentages consisted of a 32% full building study and 64.7% improvements study. The two buildings included leaseholds, equipment, and signage. In order to qualify for the full 15-year recovery period, restaurant buildings must be placed in service after Jan. 1, 2009 to encompass the full 15-year recovery period. However, from Oct. 23, 2004 through Dec. 31, 2008, the full 15-year recovery period could only be applied to improvements. Additionally, bonus depreciation served as an added benefit to those restaurant properties placed in service in 2008. If the special 15-year recovery period did not apply to these types of property, they would be depreciated over 39 years.

Property Type Class Life Percentage Depreciation
Purchase  5-Year  32.00% $87,988.57
 15-Year  23.20% $63,806.93
 39-Year  44.80% $123,204.50
Total   100% $275,000.00


Property Type Class Life Percentage Depreciation
Improvement  5-Year  64.70% $1,678,696.08
 15-Year  35.30% $914,303.92
Total   100% $2,593,000.00

Cost Segregation 

Engineered Tax Services, Inc. (ETS) has helped thousands of property owners nationally increase their cash-flow by accelerating depreciation through our cost segregation studies. Our cost segregation studies work to uncover potential tax savings and increase cash flow through reclassification and depreciation of property. ETS provides a “Detailed Engineering” review as part of our reporting process, working seamlessly with the IRS and your CPA firm for minimal disruption to your business.


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