Cost Segregation Studies in Michigan
Known for manufacturing, heavy industry, and the auto industry, Michigan is far more than the industrial heartland of America. A great venue for fishing and hunting, a mecca of college and professional sports, and plenty of nature to explore makes Michigan a favorite of tourists. Detroit, Ann Arbor, and the Grand Rapids all boast strong economies and have a solid commercial property base. From big corporate offices in Detroit to a small business in Battle Creek, every commercial property can benefit from cost segregation.
Thanks to the harsh winter weather and a collection of older properties, Michigan is a fantastic place for both short-life and long-term depreciation. Apartment buildings are ubiquitous and are a fantastic source of depreciation, both inside and out. Thanks to a massive renovation binge in Detroit, many older properties are finding themselves eligible for cost segregation again, offering property owners a solid say to use their investment to protect themselves from income taxes.
Cost segregation is diligently enforced by the IRS. With a history as a legitimized loophole, cost segregation is always under heavy scrutiny. Thankfully, the experts of O’Conner are masters of this art. With over 10,000 cost segregation reports under their belt, our expert appraisers know how to use credible methods, accurate results, and careful documentation to make the perfect report. In fact, we have never backed down in protecting any of those reports from the IRS. The following table shows other real Michiganders that benefited from an O’Connor cost segregation report.
Sample of Actual Study 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 |
---|---|---|---|---|---|---|---|---|
Medical Office | $2,265,239 | 09/01/14 | 2014 | $116,256 | $46,037 | 15.2:1 | $199,867 | 67.2:1 |
Multifamily | $8,557,381 | 12/01/15 | 2015 | $995,209 | $394,103 | 145.0:1 | $524,576 | 194.0:1 |
Restaurant | $2,150,000 | 10/01/15 | 2015 | $18,840 | $1,469 | 1.2:1 | $136,055 | 23.7:1 |
Retail | $4,815,243 | 03/01/15 | 2015 | $125,963 | $49,881 | 17.6:1 | $250,631 | 89.3:1 |
Warehouse | $3,154,044 | 12/01/14 | 2015 | $948,096 | $375,446 | 124.3:1 | $662,298 | 219.3:1 |
Results
* Results from “Catch Up” studies which allow the owner of properties purchased in previous tax years to benefit from cost segregation in the current tax year without filing amended returns.
** Mid-Quarter depreciation convention utilized due to purchase date.
***Results include bonus depreciation first year calculations.
NOTE: The above listed tax savings are based on a 39.6% tax rate for the owner.