67% of Assets Reallocated to Shorter Life Resulting in $461,354 Cash Benefit in Year One

Leasehold Improvements for Build-Out of Surgery Center in Florida

Meridian was engaged by a medical practice to conduct a cost segregation analysis on $1.7 million in leasehold improvements for the build-out of a surgery center. The objective was to identify property components which could be reclassified to shorter recovery periods to accelerate building depreciation and defer income taxes.

Our construction engineers performed an exhaustive 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 within the
provisions of the Internal Revenue Code. We subsequently completed an on-site 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.

Project Results

Due to this Engineering-based Cost Segregation Study the client was able to reallocate 67% of assets or $1,139,000 to a shorter 5 year life amounting to first year cash benefits of $461,354.