SHOPPING PLAZA

TAXES SAVED: $2,774,615

Engagement Overview:

Bedford Capital was engaged by the CPA of a shopping center client to conduct a cost segregation study on one of their properties. The objective was to identify assets to be moved to a shorter depreciation schedule and save the client taxes.

Property Overview:

This $38,000,000 development consists of a mix of buildings involving a multi- tenant strip mall, big box retailers, and stand-alone restaurants. The project includes over 700,000 sf of tenant space located on 69 acres.

Engineering Process:

Our engineers examined all and construction documents, contractor payment requisitions and other related data to determine the cost basis for every component involved with the project. Next, our engineer conducted an on-site study to identify and photograph all assets that may qualify for depreciation. Further, our site engineer, costing engineer and tax specialist identified assets that qualify as ‘Specialized Use”, i.e. outside normal use of that property type.

Estimate of Benefits:

Our pre-engagement estimate provided to the CPA & client showed a potential reallocation of $10,920,000 or 31.0% to shorter depreciable lives, resulting in a potential tax saving of over $1,992,000. Our study resulted in $15,610,000 or 40.3% of the assets being moved to shorter depreciable lives. As a result, the property owner saved over $2,774,615.