GRS | Capstan Performs Cost Segregation Study on Multifamily Residential Property, Generates Significant Tax Savings
GRS | Capstan recently performed a cost segregation study on a 16-building multifamily complex. The property consists primarily of two-story garden-style apartment buildings, along with two common buildings that house the leasing center, laundry facilities, etc. Though the property was acquired and placed-in-service in 2014, no cost segregation study had been performed until 2016.
The GRS | Capstan team completed a methodical study of the property, breaking down building assets by cost and reallocating assets to shorter-lived depreciation classes wherever possible. Over 25% of the depreciable basis was moved to 5 or 15-year class lives, resulting in an additional Year 1 cash flow of over $170,000. Since the property was acquired in 2014, the analysis also functioned as a “look-back” study, entitling owners to “catch up” on depreciation that had occurred between 2014-2016, and resulting in a significant 481(a) adjustment as well.
GRS | Capstan services performed included a Standard Cost Segregation Study as well as a Unit of Property Analysis to maximize tax savings. GRS Group director Kevin May coordinated the services provided.