Case Study
About
STR Preliminary Analysis
Analysis concluded; strategy archived. Deployment of cost segregation was restricted by two primary factors: 1) Elevated land valuation (42%) disproportionately allocating basis away from improvements, and 2) Client hold-period fluidity, which undercut the long-term net present value (NPV) of capturing immediate bonus depreciation.
Scope
01
Property Analysis & Basis Review
CSI conducted a comprehensive land-to-building value allocation analysis. The assessment revealed an elevated land valuation that compressed the depreciable basis, significantly reducing the available tax benefits of an accelerated depreciation schedule.
02
Asset Reclassification & Timeline Modeling
Modeled projected cash flows and multi-year net present value (NPV) metrics against various holding periods. Due to client hold-period uncertainty, the long-term strategic value of capturing immediate bonus depreciation could not be definitively justified, resulting in an informed project archive.
Strategic Takeaway
While a full cost segregation study was not deployed on this specific asset, our detailed preliminary analysis successfully protected the client from an inefficient tax strategy, highlighting our commitment to engineering-backed financial accuracy over generic modeling. Some of our ompetitors would definitely undertake this project, just for their own interests.
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