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  • Client:Single User Building
  • U.S. Region:Midwest
  • Type:Office Warehouse 50,000 Sqr Ft
  • Detail:16% Office, 84% Warehouse
  • Year Built/Acquired:2016 Build

Project Analysis

Office facilities have their own unique asset mix that may include decorative finishes, furniture & fixtures, and a variety of other components that qualify for accelerated depreciation treatment. Likewise, the adjoining warehouse section of the building has certain assets that qualify for accelerated treatment due to the specialized activities inherent in the storage and shipment of goods.

Accelerated assets found in office warehouse properties 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 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

Understanding revenue rulings, decisive court cases, and the application of the IRS depreciation guidelines for this type of property results in a tailored cost segregation study engineered and melded to reflect the unique characteristics in each design. Past studies have resulted in a return on investment (ROI) of 10 to 230 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.

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