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Manufacturing Facilities

Cost Segregation

Manufacturing Facilities Cost Segregation Manufacturing facilities provide a fairly balanced short life asset mixture, with heavier emphasis on 15 year assets unless significant interior space is given over to use as offices. Beyond the typical findings, many facilities include short life assets such as special electrical service, overhead cranes and hyper-dense foundation pads for heavy equipment.

Industrial Facilities Cost Segregation 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.

Manufacturing facility studies typically pay back the cost of the study in the range of 8 to 1 up to more than 50 to 1 in the first year of study use. Note the actual results highlighted in the table below. First year savings range from roughly $20,000 up to in excess of $140,000.


Sample of Actual Study Results

Depreciable Basis

$2,514,112
$1,688,640
$1,872,496
$4,979,875
$1,444,320


Purchase Date

11/1/2013
11/1/2013
4/1/2015
10/1/2015
9/1/2015


Year of Study

2014
2014
2015
2015
2015


1st Year Additional Depreciation

$365,931
$229,593
$57,342
$204,547
$26,683


1st Year Tax Savings

$144,909*
$90,919*
$22,708
$81,001
$22,447


Year 1 Payback

50.5:1
34.3:1
15.0:1
26.8:1
8.3:1


Initial 5 Years Tax Savings

$258,216
$153,978
$108,553
$362,892
$100,215


5 Year Payback

96.6:1
61.9:1
72.9:1
120.2:1
37.9:1

* 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.

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