Office Owned 15 Years – Cost Seg Study – Tax Savings: $217,281

The building had been owned for nearly fifteen years when the study was done. The owner was able to catch up on all of the 5 year depreciation and much of the 15 year depreciation that they could have been taking since acquiring the building, but instead had been depreciating over 39 years. High-end interior finishes contributed to a higher-than-average yield.

Tax Savings


First year tax savings. Additional tax savings in subsequent years.

Study Type Cost Segregation (Lookback)
Property Type Low-rise office
In-Service Date 2002
Depreciable Basis $3,413,179
Total Accelerated $871,813 (26%)
Approximate 481(a) adjustment $536,264
Additional cash flow (year 1)* $217,281
10 year net present value* $181,569

*The 481(a) adjustment, tax savings (cash flow) and net present value amounts are estimates of client’s tax deferral benefits and are general in nature rather than representing the exact benefits for the subject property. Tax savings are estimated based on a 40% combined federal and state tax rate. Net present value calculations assume a 6% discount rate and 3% return on invested cash. To protect client confidentiality a representative building image has been displayed rather than an image of the client’s actual property.

About the Author Jeff Glass

Jeff helps real estate owners increase their cash flow. He started his career as a Financial Analyst with the Irvine Company, and worked in various management/executive positions in the mortgage industry for many years. He's been a Cost Segregation consultant for several years and is considered one of the industry's top experts in TPRs. As Director of Business Development for Bedford Cost Segregation, Jeff helps his clients increase cash flow by accelerating their depreciation deductions, and by writing off assets that no longer need to be depreciated under recently changed tax rules. Jeff has a B.S. in Economics from Claremont McKenna College and an MBA with an emphasis in Finance from UC Berkeley.