Warehouse/Distribution Centers
Cost Segregation
Warehouse/Distribution Centers usually provide significant 15 year depreciable assets to go along with a slightly lower level of five year assets. Over-sized drives, parking and turning aprons provide the boost in 15 year assets, while racking systems and automated machinery holds sway on the interior.
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.
Warehouse Distribution Center studies typically pay back the cost of the study in the range of 6 to 1 up to more than 60 to 1 in the first year of study use. Note the actual results highlighted in the table below. First year savings range from roughly $24,000 up to in excess of $200,000.
Sample of Actual Study Results
Depreciable Basis
$2,535,697
$13,387,500
$2,364,375
$10,762,660
$1,269,750
Purchase Date
5/1/2014
6/1/2015
5/1/2015
4/1/2016
5/1/2016
Year of Study
2015
2015
2015
2016
2016
1st Year Additional Depreciation
$204,968
$210,322
$62,871
$524,247
$43,482
1st Year Tax Savings
$81,167*
$83,287
$24,897
$207,602
$17,219
Year 1 Payback
28.3:1
30.6:1
8.7:1
62.5:1
6.0:1
Initial 5 Years Tax Savings
$147,270
$393,985
$127,423
$947,536
$80,784
5 Year Payback
51.3:1
146.0:1
45.4:1
286.0:1
29.2:1
* 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.