Issue
After developing a $90 million multifamily property in a high-growth Western market, the client needed a tax planning strategy to reduce taxable income and improve near-term cash flow. As an LLC structured as a partnership, the client sought to maximize depreciation benefits while aligning the approach with the property’s asset mix, ownership structure, and long-term investment objectives.
Solution
To help the client maximize available tax benefits, CBIZ conducted a cost segregation study to identify assets eligible for accelerated depreciation and capture 100% bonus depreciation where applicable. By analyzing the property’s construction costs and qualifying assets, CBIZ helped the client reclassify eligible costs into shorter recovery periods, creating a more tax-efficient depreciation strategy for the newly developed multifamily property.
Outcome
The cost segregation study generated an approximately $23 million first-year tax deduction, significantly reducing the client’s taxable income. In addition to the immediate tax benefit, the strategy strengthened cash flow and provided a framework for identifying tax-saving opportunities throughout future development investments.
| Company Information | |
|---|---|
| Industry | Real Estate Development/Lessors |
| Entity Type | LLC |
| Ownership Structure | Partnership |
| Geographic Footprint | Southwest U.S. |
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