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  • Client:Garden Apartments
  • U.S. Region:Midwest
  • Type:152 Units w/Clubhouse Pool
  • Detail:154,000 Sqr Ft
  • Year Built/Acquired:2017 Build

Project Analysis

The case for apartment living as a lifestyle choice has never been stronger, with many cities seeing a shortage of apartment stock. Accelerated assets found in multi-family facilities must be analyzed by a tax expert in order to maximize depreciation - which in turn minimizes federal tax liability. Look-back cost segregation studies on these facilities can provide the tax payer with catch-up depreciation in the current tax year (depreciation that should have been claimed but was not in the absence of a study).

With the most detailed report in the industry, assets are quantified and reported in an AER Group engineered cost segregation phased analysis. Depending on the design, some properties even qualify for Section 179D tax deductions for energy efficiency.

Project Analysis

Conformance to IRS Regulations

For over thirty years our firm has tracked IRS Regulations, court cases, pronouncements, and IRS directives. This seasoned approach to cost segregation provides AER Group with the tax knowledge and expertise to drive our engineered cost segregation reporting. Enacted within the PATH Act in 2013, Regulation 1.263(a)-3(e)(2)(ii)(B) requires tax payers to segregate building components into standard asset categories, which is include in our analysis.

Our tax consulting follows the IRS Audit Techniques Guide (ATG) which has resulted in an impeccable success rate in the rare occasion one of our cost segregation studies are audited.

Return on Investment

Apartment sites are frequently developed in phases where successive phases are started only after the current phase is complete and under lease, either in whole or in part. Phasing can require a cost segregation study to be completed in multiple tax years depending on placed in service dates for each phase or partial phase. Past studies have resulted in a return on investment (ROI) of 100 to 260 times the cost of a study.

Studies apply to properties acquired/built several years ago as well as current acquisitions/builds. Newly constructed projects may qualify for bonus depreciation depending on the year they are placed in service.

Project Chart