Cost Segregation Studies for San Diego, CA
From the sparkling waters of Mission Bay to the warm tortillas of Old Town, San Diego, CA is famously known as a tourist spot. Loaded with beaches, five-star hotels, a world-famous zoo, Seaworld, and some of the best weather in the United States, San Diego is a premier destination. San Diego is also famous for its military bases, including extensive naval facilities and the Marine Corps Recruit Depot. Biotech, technology, international trade, and defense are all huge industries as well.
Like most of California, San Diego has high costs of property, be it residential or commercial. With high labor costs added on to it, this can make owning a business in San Diego as costly as it is rewarding. Thankfully, cost segregation can be used to transform depreciation into income tax savings. Any high-income commercial property can benefit from cost segregation, easily recovering the cost of a study in the first year, not to mention additional savings. Hotels, apartments, offices, and industrial properties all make perfect targets for depreciation with five, seven, or 15 years of a lifetime factor.
O’Connor does cost segregation all over the nation, but California is typically our top market, even ahead of our home state of Texas. Cost segregation is a big boon for business owners in expensive California and the demand for it is always high. With so much at stake, it pays to have experienced experts by your side to navigate all that the IRS requires. Our adept appraisers have done over 10,000 successful cost segregation studies and will always stand by their reports in the face of the IRS. The following table features a few key San Diego properties that saved with O’Connor.
Real San Diego Cost Segregation Results
| Asset Type | Depreciable Basis | Purchase Date | Year of Study | 1st Year Additional Depreciation | 1st Year Tax Savings | Year 1 Payback | Initial 5 Years Tax Savings | 5 Year Payback |
|---|---|---|---|---|---|---|---|---|
| Retail | $1,088,049 | SEP 2015 | 2015 | $316,620 | $125,381 | 104.0:1 | $176,161 | 147.0: |
| Auto Dealer | $5,306,601 | 06/01/15 | 2015 | $127,482 | $50,483 | 16.1:1 | $248,245 | 80.0:1 |
| Multifamily | $6,440,000 | 09/01/15 | 2015 | $172,075 | $68,142 | 19.8:1 | $381,631 | 112.0:1 |
| Warehouse | $4,427,651 | 07/01/15 | 2015 | $179,180 | $69,163 | 21.7:1 | $307,017 | 97.2:1 |
| Multifamily | $2,520,000 | 07/01/15 | 2015 | $86,845 | $34,391 | 10.8:1 | $153,649 | 49.3:1 |
Results
** Includes Bonus Depreciation
NOTE: The above listed tax savings are based on a 39.6% tax rate for the owner.