Restaurant | National Asset Partners

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Restaurant | National Asset Partners

Tax Benefits Summary

Cost Basis: $2,000,000

Cost Reallocated: $1,053,010

Reallocation Percent: 52.7%

1st Yr. Deferred Tax: $115,960

Total Deferred Tax: $167,174

Project Overview

The National Asset Partners team of engineers was engaged by the owners of a franchise restaurant in the mid-south to conduct an Engineering- based Cost Segregation Study for a recently purchased single building located in a popular suburban retail location. The Study objective was to identity property components that could be reclassified to shorter recovery periods to accelerate building depreciation and defer income taxes.

Property Profile

The property is a single story building containing approximately 7,300 square feet. The building exterior walls are concrete block then finished with brick veneer. The windows are insulated fixed glass in aluminum frames. Interior finishes include drywall over metal stud partitions finished with paint, vinyl wall covering, marlite and stainless steel wall protection, and hollow metal and wood doors with frames and hardware. There is a year round heating, ventilating, and air-conditioning system provided by gas & electric roof top units. The kitchen equipment has exhaust hoods, fans and a make-up air system. Electrical systems include power distribution equipment; fluorescent and incandescent light fixtures, receptacles, switches, conduit, and wire. There are multiple kitchen equipment electrical hook-ups. Land improvements include asphalt paving, concrete sidewalks, concrete curbing, concrete dumpster pad, dumpster enclosures, and landscaping with irrigation. The property has a cost basis of $2,000,000 and was acquired and placed in service in 2004.

Engineering Process

Our construction engineers performed a complete analysis of all available construction drawings and specifications, contractor payment applications, invoices, and other supporting documentation. We prepared a detailed analysis of all accumulated data on a property unit basis for cost allocation purposes under the provisions of the Internal Revenue Code. We then performed an onsite inspection to verify, photograph, and document the property. Finally, our internal audit team of senior construction engineers and tax specialists reviewed and certified its completeness and accuracy.

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