COST SEGREGATION

Your capital investment in the construction or remodel of your McDonald’s Stores may generate considerable tax savings.  Federal tax laws allow a taxpayer to identify all Accelerated Depreciation items in a building, through a Cost Segregation Study, which increase depreciation expenses and lowers taxable income - creating a net benefit to to the taxpayer.

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The Tax Code allows you to deduct, 1/39th of the total cost of your building from your taxable income, every year, for 39 years – this is Standard, Long-Life Depreciation.
However, there are components of EVERY building that can be depreciated over shorter lives.  This is called Accelerated Depreciation and it is defined in the Modified Accelerated Cost Recovery System (MACRS), a section of the Federal Tax Guidelines.

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WHAT IS COST SEGREGATION?

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Cost Segregation Analysis is the engineering and construction-based breakdown of all the costs related to your Store into three distinct categories: Personal Property, Site Work and General Building.  
A Cost Seg Study (CSS) adds detail to the summary project cost totals by estimating the numerous “small costs” involved in the construction process.  Each of these detailed costs is segregated into one of the property types (Personal, Site, or Building).

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AN ENGINEERING APPROACH TO A TAX SOLUTION

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This is the core of Cost Segregation:  Taking a few Actual Costs and turning them into many estimated takeoffs.
We utilize the as-built blueprints for your specific project.  Through the blueprints we are able to get details of the project: quantities, sizes and counts of all the components of the construction process. This information allows us to “deconstruct” the summary costs in the PCA Report.  
These detailed line items - Takeoffs - are costed out using RS Means (construction industry costing manuals).  Each trade (plumbing, electrical, HVAC, roofing, etc) is analyzed the same way.

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