Lindon Engineering Services, Inc.

cost segregation Tagged Posts

DEPRECIATION TREATMENT OF SELF-STORAGE FACILITIES

cost segregationBy: Larry Miller

One of the more surprising results we have experienced in the performance of a cost segregation study is that associated with self-storage facilities. On the surface, these monolithic structures appear to be nominally depreciated as real property and subject to 39-year, straight-line depreciation treatment; however, a deeper inspection may find as much as 40% or more of the assets can be depreciated on an accelerated basis thus providing a significant cash flow for the owner in the early years of the cost recovery cycle.

For example, site improvements can be recovered over a 15 year period commonly known as Asset Classification 00.3. What makes the self-storage facility so attractive for a cost segregation study is the large percentage of site work that is required as compared to the overall cost of the building itself. Site work which includes asphalt paving & striping, concrete sidewalks, curbing and equipment pads, concrete pavers, fencing and gates, underground s

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PORTALS, AWNINGS, CANOPIES, AND FACADES

cost segregationBy: Donald Archer

Many automotive brands have recently created “image enhancement” programs to redefine their products and provide a more distinctive and recognizable dealership. These programs have been designed to increase the visibility of the dealerships and improve the in-store experience. In order to conform to the new corporate image many dealerships are remodeling their building exteriors, which usually require the addition of new façades, canopies, portals and other exterior enhancements. This has created several questions about how we treat these embellishments in our cost segregation studies.

When confronted with a new facility exterior design, we ordinarily examine it for structural dependence or independence. This means that we investigate how the structure is supported. If it is free standing, we generally classify the structure as personal property; however, if it is integral to the building, it becomes a part of the structure and is treated as real property. We classi

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