Restaurants
Cost Segregation
Restaurants typically offer a balance of short life components. Our restaurant cost segregation studies consider both the service area and food preparation area within the building, making sure we focus beyond the standard short life components to pick up food service specific items such as walk-in refrigeration, special electric and/or gas sectors as well as the special HVAC involved in exhaust hoods.
Additional opportunities are found on the exterior in the lighted parking areas and frequently lush landscaping. Our studies also break out the IRS mandated Units of Property when considering the long-term components present in your building.
Our restaurant studies typically pay back the cost of the study in the range of 6 to 1 up to almost 40 to 1 in the first year of study use. Note the actual results highlighted in the table below. First year savings range from almost $20,000 for a modestly sized restaurant building up to in excess of $140,000 for a large asset!
Sample of Actual Study Results
Depreciable Basis
$2,307,677
$6,624,612
$680,000
$1,417,927
$660,318
Purchase Date
8/1/2014
3/1/2014
5/1/2016
12/1/2014
4/1/2013
Year of Study
2014
2014
2016
2014
2014
1st Year Additional Depreciation
$152,678
$354,238
$47,001
$171,263
$81,082
1st Year Tax Savings
$60,460
$140,278
$18,612
$67,820
$32,109*
Year 1 Payback
22.8:1
38.4:1
8.3:1
5.9:1
30.2:1
Initial 5 Years Tax Savings
$254,663
$624,762
$82,554
$83,986
$58,812
5 Year Payback
97.1:1
172.0:1
37.9:1
74.1:1
56.3:1
* 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.