Annual Revenue: $165 million

Industry: Real Estate

Geographic Footprint: New York City and Washington D.C. metro areas

Ownership Structure: Holding company composed of family-owned partnerships

Client Profile

Federal Tax Case Study

www.cbiz.com/federaltax

Learn more about our commitment to proactive, personalized service and managing your tax burden.

Service for Your Unique Circumstances

Real Estate Developer Benefits from more than $8 million in Tax Savings

IssueA real estate developer reached the end of its second renovation in two years. At the same time, it was also finalizing the acquisition of a property that underwent building updates. CBIZ MHM identified that all three projects presented opportunities to accelerate some of the developer’s renovation expenses.

SolutionBy examining the developer’s tax filings, depreciation schedules and building plans, our team separated the assets that must be depreciated over 27.5 or 39 years as part of the building’s costs from those that could be placed into shorter 5, 7 and 15-year lives. One significant asset that had been depreciated over a long life qualified for a shorter one, which allowed for a catch-up of depreciation expense that hadn’t previously been claimed.

Our team also considered what the real estate developer renovated, which allowed for benefits on top of those identified by the cost segregation study. The developer’s updates to its building’s lighting, plumbing, windows and HVAC systems qualified as repairs under the recently enacted tangible property regulations.

OutcomeThe cost segregation studies and the evaluation of the tangible property regulations on the three renovation projects allowed the developer to accelerate several development-related expenses and significantly reduce its current year tax liability. The cumulative present value of the tax savings to the client exceeds $8 million.

© Copyright 2016. CBIZ, Inc. NYSE Listed: CBZ. All rights reserved.

For more information on how you can benefit from cost segregation or the tangible property regulations, please contact Larry

Rosenblum. Larry can be reached at 561.922.3006 or lrosenblum@cbiz.com.

Taking full advantage of a cost segregation study and the benefits under the tangible property regulations requires careful examination of your operations. Our team is adept at uncovering hidden opportunities and implementing solutions that lead to significant tax savings.