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District of Columbia Cost Segregation Study

Cost Segregation Study Results

Cost Segregation is a viable cash flow enhancing tool regardless of location. Cost segregation is an IRS approved methodology that works equally well in all 50 states. Savings are a result of Cost Segregation building depreciation allocations. Cost segregation is the process of identifying personal property assets that are grouped with real property assets, and then separating out personal assets for tax reporting purposes. Cost segregation studies conducted by the nation-wide leader O’Connor & Associates exceed the IRS standards for a quality study to reduce federal income taxes and pass IRS audits. Working with your CPA, our cost segregation study will reduce your federal income taxes. We can conduct a cost segregation study within weeks of being engaged, or provide a comprehensive preliminary estimate of tax benefit within 24 hours, allowing you to assess the potential tax benefit and decide if cost segregation will help you reduce your income tax burden and increase cash flow. blank It is this simple: if you own commercial real estate and are not using cost segregation, you are paying too much in federal income taxes. O’Connor & Associates has experienced state-licensed appraisers who have performed cost segregation studies for thousands of commercial properties across the nation. We can prepare a thorough report to document the total amount of depreciation you are entitled to report to the IRS (5, 7, 15, 27.5, 39-year commercial property) as well as the land value. Your CPA will welcome the backup documentation!

Sample of Actual Study Results

Asset Type

Warehouse Multifamily Retail Office Building Industrial

Depreciable Basis

$10,762,660 $7,489,800 $7,307,800 $14,492,130 $6,475,947

Purchase Date

APR 2016 FEB 2016 MAY 2016 JUN 2016 MAR 2016

Year of Study

2016 2015 2016 2016 2016

1st Year Additional Depreciation

$524,247 $328,163 $258,593 $509,649 $126,651

1st Year Tax Savings

$207,602 $129,953 $102,403 $201,821 $50,154

Year 1 Payback

62.5:1 48.1:1 30.8:1 63.6:1 13.8:1

Initial 5 Years Tax Savings

$947,536 $680,740 $471,298 $996,607 $286,719

5 Year Payback

286.0:1 220.0:1 143.0:1 315.0:1 80.1:1
* 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.