Offsetting costs and maximizing tax savings with cost segregation techniques

Challenge

An assisted living and memory care facility owner in New England was undertaking a new construction project and wanted to find creative opportunities to offset increased construction costs.

Solution

BerryDunn consultants:

• Identified major asset categories and costs associated with personal property within each category
• Utilized engineering-based segregation techniques to define assets with shorter depreciable lives

Outcome

The new senior living facility was able to maximize tax savings by identifying assets with shorter lives and depreciating them over shorter time periods (including bonus depreciation) while also providing the support necessary to demonstrate compliance with IRS rules and regulations.