First Year Projected Increased Cash Flow of $283,221

New Construction of Assisted Living Facility in Georgia

Meridian was contracted by a national assisted living provider to conduct an engineering-based cost segregation study for a new assisted living residence. The objective was to identify property components which could be reclassified to shorter recovery periods to accelerate building depreciation and defer income taxes. Additionally, the frequent resident turnover and continuous state of repairs provided the opportunity to help increase the benefit recognized by the taxpayer by accounting for repair expenses and partial dispositions.

Tax Benefits Summary

• Cost Basis: $3,200,000
• Cost Reallocated: $1,151,000
• Reallocation Percent: 36%
• 1st Year Cashflow : $283,221

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 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 completeness and accuracy.

Project Results

The client reallocated $1,151,000, or 36% of the assets to shorter recovery. First year depreciation is projected to amount to a total of $708,053.