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Home > Services > Tax > Cost Segregation
Cost Segregation - Welcome Choice Hotel Franchisees!
How can a cost segregation study benefit you? Virchow Krause could dramatically reduce your current income tax liability. These studies allow companies and individuals to increase their cash flow by accelerating their depreciation expense. This means companies benefit by using more of their deductions up front, rather than in future years.
Solutions Beyond the Basics
We have conducted over 4,000 cost segregation studies for companies nationwide - many of them performed specifically for hotels. The studies are available to companies and individuals who have constructed, purchased, remodeled, or expanded a building and can even be done years after a property is put into service. Below are two examples of how we have helped two Choice Hotel franchisees:
Cost Segregation Study on New Construction*
A cost segregation study was performed on a newly constructed Choice Hotel. The total construction cost was $1.9 million. Our study allowed this franchisee to accelerate the depreciation expense. This resulted in a short-term increase in cash flow of $103,000.
Cost Segregation on a Pre-existing Property*
A cost segregation study was performed in 2004 on a Choice Hotel that was purchased for $2.1 million in 2001. As a result of the study, we were able to utilize catch-up depreciation to uncover an extra tax deduction for the franchise in 2004 of over $210,000.
* These are actual case studies. However, results of cost segregation studies vary per project.
Advantages for You
Find out if a cost segregation study makes sense for you.
- Contact us to arrange a complimentary initial assessment. If that assessment reveals potential benefit, we will tell you how much you will save and what our fee would be.
- The benefits of a cost segregation study often outweigh the cost factors by ten times or more.
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