Case 8

Scenario

A manufacturer purchased a 200,000 sq. ft. industrial facility for $20 million to expand its operations.

Objective

Optimize tax savings to reinvest in expanding production capabilities.

Solution

The cost segregation study identified a variety of personal property assets, including specialized machinery, certain electrical systems, and non-structural components, valued at approximately $6 million.

Result

The accelerated depreciation of $6 million in personal property allowed the manufacturer to deduct a substantial amount of the purchase price over a shorter period, resulting in nearly $1.8 million in first-year tax savings, which was reinvested into the business for growth.