{"id":25687,"date":"2025-01-24T15:08:18","date_gmt":"2025-01-24T15:08:18","guid":{"rendered":"https:\/\/leyton.com\/us\/?post_type=white_paper&p=25687"},"modified":"2025-01-24T15:08:19","modified_gmt":"2025-01-24T15:08:19","slug":"heavy-manufacturing-facilities-cost-segregation-case-study","status":"publish","type":"white_paper","link":"https:\/\/leyton.com\/us\/insights\/white-papers\/heavy-manufacturing-facilities-cost-segregation-case-study\/","title":{"rendered":"Heavy Manufacturing\u00a0Facilities Cost Segregation Case Study"},"content":{"rendered":"
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Maximize Your Heavy Manufacturing Facilities<\/mark><\/strong> Tax Strategy <\/h2>\n \n \n

What is Cost Segregation<\/mark><\/strong>
Cost segregation<\/mark><\/a> <\/strong>is an effective tax planning strategy that helps businesses and individuals involved in constructing, purchasing, expanding, or renovating real estate<\/strong> reduce their tax liabilities by accelerating depreciation deductions, which allows for the deferral of both federal and state income taxes.

Heavy Manufacturing Facilities<\/mark><\/strong>
Heavy manufacturing facilities often rely on advanced, high-tech equipment, making them ideal candidates for cost segregation. This strategy allows owners to separate assets like machinery, production lines, and specialized systems, qualifying them for accelerated depreciation. By doing so, owners can reduce taxable income, improve cash flow, and free up capital for reinvestment. Ultimately, cost segregation helps optimize tax positions, enhance financial performance, and increase long-term profitability.
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Cost Segregation for Heavy Manufacturing\u00a0<\/mark><\/strong><\/h2>\n <\/div>\n
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This case study highlights the benefits of accelerated depreciation for manufacturing facilities, showing how optimizing depreciation on equipment and machinery can reduce taxable income, improve cash flow, and boost profitability.<\/p>\n <\/div>\n <\/div>\n

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Building information <\/mark><\/h3>\n

\u25cb <\/strong><\/mark>Building Type<\/strong> \ud83e\udc6a <\/mark>Heavy Manufacturing
\u25cb <\/strong><\/mark>Property Type:<\/strong> \ud83e\udc6a <\/mark> Commercial
\u25cb <\/strong><\/mark>Building Size:<\/strong> \ud83e\udc6a <\/mark> 524,298 SF
\u25cb<\/strong><\/mark> Study Scope:<\/em><\/strong> \ud83e\udc6a <\/mark>Acquisition
\u25cb<\/strong><\/mark> Condition<\/strong>: \ud83e\udc6a <\/mark>Good
\u25cb<\/strong><\/mark> Filling Year:<\/strong> \ud83e\udc6a <\/mark> 2023
\u25cb<\/strong><\/mark> Date Placed in Service:<\/strong> \ud83e\udc6a <\/mark> 2018
\u25cb<\/strong><\/mark> Purchase Price less Land or Total Construction Cost:<\/strong> \ud83e\udc6a <\/mark> $62,500,000
\u25cb<\/strong><\/mark> Tax Rate:<\/strong> \ud83e\udc6a <\/mark> 30%
\u25cb<\/strong><\/mark> Return on Investment Factor:<\/strong> \ud83e\udc6a <\/mark> 8%<\/p>\n <\/div>\n

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Summary of Benefits<\/mark><\/h3>\n

\u25cb<\/mark> 25% Additional Tax Deductions in First Year:<\/strong> \ud83e\udc6a <\/mark>$40,035,373

\u25cb<\/mark> RNPV Over Remaining Life of Property<\/strong>: \ud83e\udc6a <\/mark>$10,319,017

\u25cb<\/strong><\/mark> <\/em>Net Present Value (NPV) Over 10 Years:<\/strong> \ud83e\udc6a<\/mark> $11,588,414
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Building Allocation After Study <\/span>\n <\/h2>\n <\/div>\n