Client Background

The business owner purchased an industrial manufacturing plant in Los Angeles for $2.8 million, which housed both their business operations and real estate. Several years after placing the building in service, they engaged GOSE to conduct a critical cost segregation study.

Challenges Faced

The primary challenge was to identify and capture all missed depreciation opportunities from prior years, aligning with IRS guidelines to optimize tax deductions.

Our Approach

Our seasoned team of cost segregation experts implemented a meticulous strategy:

1. Detailed Asset Identification:
   • We meticulously reviewed the building’s assets, including structural components, electrical systems, HVAC units, and other eligible components for accelerated depreciation.
2. Comprehensive Study Execution:
   • Leveraging our expertise, we performed an exhaustive cost segregation study tailored to IRS standards and industry best practices.
   • Our analysis aimed to catch all missed depreciation opportunities from prior years, maximizing tax benefits for the client.
3. Method of Accounting Change Assistance:
   • We guided the client through the application process to change their method of accounting, ensuring they could realize the full benefit of additional depreciation deductions on their tax returns.

Outcome

Our cost segregation study uncovered significant depreciation deductions previously overlooked, providing substantial tax savings and cash flow benefits for the client. By assisting with the method of accounting change, we ensured the client could retroactively capture missed depreciation and optimize future tax planning strategies.

Conclusion

This case highlights our expertise in cost segregation, where we not only identified missed depreciation opportunities for an owner-occupied industrial plant but also facilitated substantial tax savings through strategic planning and method of accounting adjustments. At GOSE, we are committed to maximizing tax efficiencies and enhancing financial outcomes for business owners across Los Angeles and beyond.