Client Background
A high-volume car dealership specializing in luxury vehicles wanted to reduce taxable income and reinvest savings into showroom upgrades and service center expansion. The client hired Development Theory to do a cost segregation study for a dealership.
The Challenge
Expensive Showroom & Service Center Upgrades: The dealership had significant real estate and interior buildout costs.
Delayed Depreciation on Equipment & Fixtures: Lighting, display racks, and specialized equipment were all depreciated too slowly.
High Property Tax Assessments: The business was overpaying on property taxes, further straining cash flow.
Our Approach
Reclassification of Showroom & Service Equipment: Identified displays, lighting, and service bay tools eligible for shorter depreciation.
Bonus Depreciation Maximization: Applied 100% depreciation on new installations.
Land Improvement Tax Optimization: Shifted parking lots, landscaping, and signage into a 15-year depreciation schedule.
Property Tax Reduction Assistance: Provided a detailed cost analysis to help the owner appeal property tax assessments.
Financial Forecasting for Reinvestment Planning: Created a cash flow strategy for reinvesting tax savings into expansion.
The Solution
Reclassified $3.5 million in assets, allowing for accelerated depreciation.
Reduced property tax obligations, improving long-term savings.
Applied bonus depreciation, creating an immediate tax deduction.
Results & Impact
Saved $1.4 million in taxes, freeing up capital.
Increased dealership profitability, making financing expansion easier.
Reduced future tax obligations, improving cash flow planning.
Enabled faster reinvestment into showroom and service center upgrades.
Client Feedback
"We were overpaying in taxes simply because we didn’t know our assets could be depreciated faster. This strategy gave us the cash flow to expand and modernize!"
Development Theory Can Help Business Owners Like You
Are you leaving money on the table with slow depreciation? A Cost Segregation Study can accelerate your tax deductions, improve cash flow, and free up capital to reinvest in your business. Whether you own commercial real estate, a rental property, or a specialty facility, our team at Development Theory helps business owners maximize tax savings while staying IRS-compliant. The best time to conduct a study is within the first few years of property ownership or after major renovations—don’t wait to take advantage of these savings.
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