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Auto Dealership Cost Segregation Case Study

Cost Segregation is a commonly used strategic tax planning tool that allows companies and individuals who have constructed, purchased, expanded or remodeled any kind of real estate to immediately reduce tax by accelerating depreciation deductions and deferring federal and state income taxes. The following is a case study for an auto dealership to demonstrate the benefits of accelerated depreciation on this property type.

Building Type: Auto Dealership

Summary of BenefitsResults
Additional Tax Deductions in First Year$896,720
Net Present Value (NPV) Over 10 Years$259,978
NPV Over Remaining Life of Property$214,826
*Benefits typical for tax returns filed 2018-2022

Building Allocation After Study

Auto Dealership CS Graph

Building Information

Purchase Price of Property (less land)$3,490,000
Property TypeAuto Dealership
Building Sq Ft30,000
Entire Site Sq Ft196,100
Date AcquiredJuly - Current Tax Year
Federal Tax Rate29.6%
State Tax Rate5%
Combined Tax Rate34.6%
ROI Factor8%
Bonus Depreciation100%

Calculate Your Tax Savings

Use our Cost Segregation Savings Calculator to estimate tax savings for your type of building. Enter building details for instant results at kbkg.com/costsegregation/calculator.


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Auto Dealership CS

Cost Segregation Insights

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