Auto Dealerships & Service Centers
Cost Segregation
Auto Dealerships and Service Centers usually provide significant 15 year depreciable assets! For dealerships, expansive parking areas, coupled with perimeter fencing and extensive exterior lighting systems dominate the 15 year life assets, while well-appointed
office/sales space provides a selection of 5 year life assets. Service Centers, with similar if smaller scale exterior appointments, also provide shorter life assets to be found in offices, waiting areas and service bays.
In addition to all extant short life assets, our studies break out the
IRS mandated Units of Property when considering the long-term components present in your building.
Auto Dealerships and Service Center studies typically pay back the cost of the study in the range of 2 to 1 up to more than 20 to 1 in the first year of study use. Note the actual results highlighted in the table below. First year savings range from roughly $10,000 up to in excess of $75,000.
Sample of Actual Study Results
Depreciable Basis
$3,699,701 $500,000 $3,441,738 $5,306,601 $2,226,210
Purchase Date
2/1/2015 4/1/2014 12/1/2014 6/1/2015 6/1/2015
Year of Study
2015 2014 2014 2015 2015
1st Year Additional Depreciation
$199,352 $17,254 $27,478 $127,482 $50,445
1st Year Tax Savings
$78,943 $5,280 $10,881 $50,483 $19,976
Year 1 Payback
21.8:1 1.6:1 3.0:1 16.1:1 5.7:1
Initial 5 Years Tax Savings
$230,038 $23,156 $178,520 $248,245 $100,674
5 Year Payback
64.5:1 7.9:1 50.3:1 80.0:1 29.7:1* Results from “Catch Up” studies which allow the owner of properties purchased in previous
tax years to benefit from cost segregation in the current tax year without filing amended returns.
NOTE: The above listed tax savings are based on a 39.6% tax rate for the owner.
