There is Money Hidden in The Components of Your Car Wash!
2018 tax bill allows for 100% bonus depreciation!
If you own or lease a car wash <$500K basis (single asset) and want to ‘find’ money hidden in this property through additional tax benefits, consider a cost segregation study or Residential Rentals, Condos, Town-homes & Smaller Commercial Buildings/Properties.
Accelerated Depreciation <$500K basis (single asset)
Cost Segregation Example:
TYPICAL CAR WASH
First Year Tax Benefit:
Five Year Tax Benefit:
Timing is everything, especially true in real estate. Now is the time to consider cost segregation for your car wash.
Cost segregation studies are not new, but there are still commercial property owners who still have not taken advantage of the full tax savings available.
Maximizing Cost Savings
Because cost-segregation studies require combined expertise in construction, engineering, and accounting, it is important to work with qualified professionals.
Q. How much can I typically benefit from having a CS study?
A. Car Washes typically realize a 18% – 28% tax benefit.
Q. When is the best time to have a CS Study?
A. The best time to have a CS study is now. Whether you recently
constructed or have owned your property for 10 years, you are
entitled to these tax benefits.
Q. Is my CPA already doing CS?
A. We work as a compliment to your CPA, most CPA’s do not have
the engineering team in place to conduct these types of studies.
Conducting a Cost Segregation Study is in ADDITION to what your CPA may have already taken.
Cost-segregation studies can help car wash owners increase their tax savings.
In recent years, many car wash owners have become more familiar with the tax benefits of cost segregation. Due to cost and complexity, these studies were once only practical for large property owners. However, recent changes in the tax laws have made cost segregation beneficial and more affordable for all commercial owners.
These changes create opportunities for all car wash owners. The use of cost segregation results in improved after-tax cash flow, which may make deals more attractive. The study may reveal larger depreciation deductions, and therefore, allow for greater after-tax cash flow.
Cost-segregation studies also can be useful in lease negotiations. Landlords and leasing professionals should be aware of items that qualify for a shorter depreciated tax life so that tenant improvement allowances can be used specifically for these items.
Cost segregation’s most obvious benefit is the ability to increase cash flow by maximizing depreciation deductions in a car wash’s early years. A second, more valuable benefit is the ability to defer income taxes to a later date, thereby receiving more valuable dollars today and recognizing a significant net present value benefit over a project’s life cycle.
For Franchise Car Wash Owners
We can brand our cost segregation studies for your franchisees and increase cash flow for more opportunity to build more businesses or make improvements.
Franchise properties are frequently built to a specific plans governed by the parent company. These properties are often heavy in equipment as well as decorative touches to maintain the branding of the franchiser. These attributes make them great opportunities for cost segregation as the percentages of personal property are usually higher than a comparable property of another type.
Additionally, successful franchise owners tend to own multiple locations. These locations are often similar with minimal differences in order to maintain the company standard. This allows for efficiencies when reviewing. Frequently when looking at franchise locations, the cost per study drops significantly as multiple properties can be reviewed at the same time.
contact us today!