Medical Center saved $2,390,464 in income taxes using cost segregation!
It is with great pleasure that we share with you the results of a cost segregation study done for Riverview Regional Medical Center. This is a full service hospital that had recently undergone remodeling and was placed into service of March 2012. Riverview Regional Medical Center consists of 224 private rooms, 62 semi private rooms, an expandable ER with 9 urgent care rooms as well as multiple operating rooms. In addition this hospital also features full laboratory services, imaging/radiology services, and a physicians wing. The total depreciable cost basis for this hospital was $21,708,000. RiverView Regional engaged us at Segregation Holding to conduct a cost segregation study in the hopes that the study would allow the hospital to save some money.
During a cost segregation study, one or more members of our team of professional engineers will come to your location to verify all assets that qualify for accelerated depreciation. As a general rule of thumb, commercial property is depreciated over 39 years. A cost segregation study identities all assets that are eligible to depreciate over a much shorter life span. Tangible personal property qualifies to depreciate over 5 or 7 years. Land improvements can be accelerated to 15 years. The savings that can be achieved by using this IRS method is called MACRS. Riverview Regional Medical Center qualified for all available MACRS savings.
After completing the initial benchmark estimate it was determined that a potential reallocation of assets would save this hospital $3,792,396! This means that over 28% of the assets qualified for a shorter depreciation period. In addition, the projected tax benefit in the first year alone was over $280,000. A tremendous savings indeed. However, when our engineer got back to the office and began the number crunching process even more savings were found.
In the end, our final result for this hospital resulted in a total of $6,829,900, or 46.8%, being reclassified to 5 and 15 year property. As a result, Riverview Regional Medical Center retained $2,390,464 in current year income tax benefits.
Don’t you think it is time, we helped your business to lower their income tax burden and increase your cash flow? If you own a profitable business, we can help. We are so certain that our methods will work that we even offer a guarantee. So head on over and fill out our free estimate and be on the road to savings today.
Contact us at 972-897-8019 or 443-Cost-Seg.