Cost Segregation – Fast Food Restaurant

Client Profile & Study Results
As the Tax Cuts and Jobs Act eliminated the 15-Year Qualified Restaurant Property, discussions regarding Cost Segregation are significant. Recently, a fast food franchise owner contacted McGuire Sponsel to perform a cost segregation study for a newly built restaurant. The restaurant was constructed for $1,525,736. McGuire Sponsel professionals reviewed the construction drawings and conducted a site visit. This enabled our team to reclassify 59 percent of the total depreciable property into 5 or 15-year property. The accelerated depreciation deductions resulted in an increased cash flow of $282,502 over the first year and a net present value of $211,452 over the life of the investment. The client has since conducted cost segregation studies on three more of his locations as the benefit provides a substantial impact to his overall tax planning.