{"id":25688,"date":"2025-01-24T15:02:14","date_gmt":"2025-01-24T15:02:14","guid":{"rendered":"https:\/\/leyton.com\/us\/?post_type=white_paper&p=25688"},"modified":"2025-01-24T15:02:15","modified_gmt":"2025-01-24T15:02:15","slug":"cost-segregation-case-study-light-manufacturing","status":"publish","type":"white_paper","link":"https:\/\/leyton.com\/us\/insights\/white-papers\/cost-segregation-case-study-light-manufacturing\/","title":{"rendered":"Cost Segregation Case Study – Light Manufacturing \u00a0\u00a0"},"content":{"rendered":"
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Maximize Your Light Manufacturing Faclities<\/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.

Light Manufacturing<\/mark><\/strong>
For light manufacturing facilities, by accelerating depreciation deductions, this approach helps lower tax liabilities and allows for the deferral of federal and state income taxes, resulting in improved cash flow. Light manufacturing facilities, often characterized by their specialized equipment and flexible layouts, are particularly well-suited for cost segregation. By optimizing their tax positions through this strategy, owners can maximize the financial benefits of their investments and enhance overall profitability.\u00a0
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Practical Example <\/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>Light Manufacturing
\u25cb <\/strong><\/mark>Property Type:<\/strong> \ud83e\udc6a <\/mark> Commercial
\u25cb <\/strong><\/mark>Building Size:<\/strong> \ud83e\udc6a <\/mark> 64,413 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>$21,563,393

\u25cb<\/mark> RNPV Over Remaining Life of Property<\/strong>: \ud83e\udc6a <\/mark>$5,912,221
\u25cb<\/strong><\/mark> <\/em>Net Present Value (NPV) Over 10 Years:<\/strong> \ud83e\udc6a<\/mark> $6,330,049<\/p>\n <\/div>\n <\/div>\n\n <\/div>\n<\/section>\n\n

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Building Allocation After Study <\/span>\n <\/h2>\n <\/div>\n