Property Overview
This case study features a mobile home park acquired in October 2020 for $5,670,000 (excluding land). The property spans 55.8 acres, with a 163-square-foot building. The cost segregation study was applied to the 2020 tax year, utilizing a 37% tax rate and an 8% present value rate of return.
With 100% bonus depreciation, the property owner was able to accelerate tax deductions significantly, enhancing cash flow and overall tax efficiency. The study reclassified various property components into shorter depreciation categories, maximizing the financial benefits.
| Property Type | Mobile Home Park |
| Purchase price(less land) | $5,670,000 |
| Building sqft | 163 |
| Entire site sqft | 55.8 Acres |
| Data acquired | October 2020 |
| Tax year study applied | 2020 |
| Tax rate | 37.0% |
| Present value rate of return | 8% |
| Bonus depreciation | 100% |
Building Allocation After Study
Cost Segregation Study Benefits
The cost segregation study resulted in $1,118,470 in first-year tax savings, with an NPV of $858,509 over 10 years and $666,348 over the remaining life of the property. When reinvested, these savings equate to a future value of $5,322,958.
The study allocated property components into accelerated depreciation categories, with $821,696 designated as 5-year property, $2,552 as 7-year property, $2,221,733 as 15-year property, and $2,624,019 as 27.5-year property. These classifications allowed the owner to front-load deductions, improving financial flexibility and reinvestment potential.
Financial Benefits Achieved
| Immediate Tax Savings | $1,118,470 |
| NPV Over 10 Years | $858,509 |
| NPV Over Remaining Life of Property | $666,348 |
| Future Value of Invested Savings | $5,322,958 |
