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Gas Station 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 a gas station with a convenience store to demonstrate the benefits of accelerated depreciation on this property type.
What is Cost Segregation?
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 increase cash flow by accelerating depreciation deductions and deferring federal and state income taxes.
Building Type: Gas Storage with Convenience Store
|Summary of Benefits||Results|
|Additional Tax Deductions in First Year||$551,904|
|Net Present Value (NPV) Over 10 Years||$319,326|
|NPV Over Remaining Life of Property||$256,874|
|*Benefits typical for tax returns filed 2018-2022|
Building Allocation After Study
|Purchase Price of Property (less land)||$1,860,000|
|Property Type||Gas Station w/ Convenience Store|
|Building Sq Ft||6,800|
|Entire Site Sq Ft||76,100|
|Date Acquired||July - 2016|
|Federal Tax Rate||29.6%|
|State Tax Rate||5%|
|Combined Tax Rate||34.6%|
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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Cost Segregation Insights
PASADENA, Calif. – KBKG, a tax credits and incentives consulting firm, has announced the promotion of Amar Patel to Principal of Cost Segregation. Patel is based out of the firm’s Southeast office and most recently spent the past two years as the Director of Cost Segregation. “Amar and I have known each other our entire … Read More
Looking for CPE credit? We have several sessions available this month. Click the links below to register. If you have questions or need help registering, please email [email protected] Research & Development Tax Credits 11/1/2022 | 12:00 PM PT | 1 hour | 1 CPE credit This webinar will cover the fundamentals of the Research and … Read More
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Attending the 2022 Tal Glenn Memorial Golf Tournament is our Principal, Eddie Price, and our Regional Director, Matthew Geltz, who will represent KBKG at the event, which takes place on October 24th in Tyler, Texas at The Cascades Golf & Country Club. About the Event The Tal Glenn Memorial Golf Tournament is an annual golf … Read More
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Research & Development Tax Credit Principal, Jonathan Tucker and Director, Ian Williams will be speaking on Research and Development Tax Credits Overview and Recent Updates. Their presentation is taking place on Thursday, June 9th from 10:30 AM – 11:20 AM. Regional Director, Chad Niehaus is speaking in a 25-minute Ted-Talk, a new way of presenting … Read More
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The IRS and Treasury released Rev. Proc. 2022-14 earlier this year, updating and superseding the current list of automatic method changes. Background Taxpayers generally cannot change from an established accounting method to a different method unless they first obtain IRS consent to change from the established accounting method. Taxpayers must obtain IRS consent to change … Read More
As featured in Accounting Today Real estate owners have limited options to pull cash out of a 1031 exchange without having to pay income tax. With proper tax planning, this problem can be solved with a cost segregation study. The application of cost segregation for this purpose may vary depending on the tax rules in … Read More
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