Cost Segregation Studies in Missouri
The “show me state” is on the rise as one of the growing centers in Middle America. Famous for agriculture, limestone quarries, and manufacturing, Missouri is becoming quite the destination for biochemical engineering, winemaking, and science. With a trio of big cities in Kansas City, St. Louis, and Springfield, Missouri has plenty of urban life and industry, while still staying connected to the agricultural past.
Able to run the gamut from rural to urban, the commercial properties of Missouri offer a ripe field for cost segregation. Newer construction is a magnet for cost segregation, but so are older buildings that have been renovated. This means that the full spectrum of Missouri commercial property is open to the use of short-life and long-term depreciation. External sources like parking lots, lighting, fencing, and landscaping can all be used to reduce income taxes with depreciation. The interior of commercial properties like apartment buildings, offices, and even rental homes can work just as well.
Apartments are usually the No. 1 commercial property type in a state, and Missouri is no exception. The experts of O’Connor have done countless cost segregation studies in Missouri, most involving multifamily housing, such as apartment blocks and high-rise dwellings. Having done over 10,000 cost segregation studies across the United States, the expert appraisers at O’Connor know how to find every piece of depreciation scattered across Missouri. The table below gives a few real-life examples of Missourians helped by cost segregation reports from O’Connor.
Real Cost Segregation Results in Missouri
| 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 |
|---|---|---|---|---|---|---|---|---|
| Industrial | $9,683,483 | 07/01/07 | 2015 | $654,137 | $259,038 | 78.0:1 | N/A | N/A |
| Office Warehouse | $712,379 | 12/01/04 | 2014 | $50,307 | $19,922 | 7.0:1 | N/A | N/A |
| Retail | $4,505,000 | 12/01/14 | 2014 | $49,540 | $19,618 | 6.4:1 | $305,349 | 101.0:1 |
| Medical Office | $1,278,459 | 12/01/15 | 2015 | $203,857 | $80,727 | 44.9:1 | $89,538 | 50.9:1 |
| Office Warehouse | $1,425,628 | 04/01/09 | 2014 | $157,792 | $62,485 | 22.1:1 | N/A | N/A |
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.