Case Study
About
Engineering-Led Study Unlocks Massive Tax Savings
A detailed cost segregation study was conducted for an alpine amusement facility placed in service in 2023. While the client originally estimated a total depreciable basis of $5.7M to be depreciated entirely over a standard 39-year straight-line schedule, our engineering-based analysis completely restructured their depreciation strategy as well as found another $1.4m in site prep that was added to the basis.
Scope
01
Property Analysis & Basis Review
Our team evaluated the amusement facility's structures and amenities. Beyond the initial $5.7M building cost estimate, a comprehensive engineering review successfully identified an additional $1.4M in qualifying site preparation costs that had been entirely omitted, increasing the depreciable basis to over $3.1M.
02
Asset Reclassification & Results
By analyzing specialized electrical systems, structural assets, and extensive site prepping required for the park's operations, we reallocated 33% ($2.3M) into 15-year assets and 5% ($365K) into 5-year personal property. This strategy immediately shifted 38% of the total basis out of the rigid 39-year straight-line schedule.
The Bottom Line
Restructuring the depreciation strategy for the heavy infrastructure of this recreation facility yielded a total 10-Year Net Present Value (NPV) cash flow benefit of $549K. This engineering-led analysis ensures the property maximizes its accelerated cash flow while maintaining strict compliance.
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