Cost Segregation in Boston, MA
As one of the oldest cities in the United States, Boston has a rich history and many complex traditions. A center of learning in the New World since the 1600s, Boston has one of the largest and most prestigious education systems in the nation. As a nexus for tourism, tech, education, entertainment, and sports, Boston has a strong economy that has also driven the cost of living to the top of the charts. With so much value packed into a small space, Boston is one of the top targets for cost segregation.
Cost segregation can use accelerated depreciation of a commercial property to lower the income taxes of the owner. Whether it is with short-life assets or long-term ones, cost segregation can shield property owners from aggressive income taxes, helping counter the cost of living in Boston and surrounding areas.
As a hub of many industries and homes to 5 million people, Boston makes for an excellent opportunity for real estate investment. From laboratories to student housing, to port facilities and warehouses, Boston can play host to any commercial property imaginable. As one of the most livable cities in the world, Boston is set to grow in the next few decades.
Get the best deal possible on your cost segregation study when you join forces with O’Connor. Though there are some upfront costs, a cost segregation study will easily pay for itself many times over in just the first year. Let O’Connor build the perfect report, which will meet every demand by the IRS. The following table lists just a few cases that O’Connor has been able to resolve for large savings.
Real Study Results by O’Connor
| 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 |
|---|---|---|---|---|---|---|---|---|
| Office | $1,600,000 | 04/01/16 | 2016 | $51,442 | $20,371 | 6.2:1 | $98,072 | 31.1:1 |
| Retail | $4,845,885 | 11/01/15 | 2015 | $60,550 | $23,978 | 9.1:1 | $396,671 | 151.0:1 |
| Office | $3,570,000 | 06/01/16 | 2016 | $115,440 | $45,714 | 15.3:1 | $203,580 | 69.1:1 |
| Warehouse | $1,570,481 | 12/01/14 | 2014 | $76,899 | $30,452 | 11.2:1 | $126,157 | 47.4:1 |
| Multifamily | $19,643,142 | 06/01/14 | 2015 | $1,403,021 | $555,596 | 188.0:1 | $952,952 | 323.0:1 |
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.