An engineering firm that specializes in municipal wastewater and potable water treatment systems engaged McGuire Sponsel to conduct a four-year R&D tax credit study. The client was converting from a C corporation to an S corporation and had a large built-in gains tax due.
McGuire Sponsel conducted fieldwork and interviewed key principals, project engineers, and designers to gain an understanding of the company’s development process and qualified projects. McGuire Sponsel professionals then analyzed the client’s extensive project list and time-tracking data to calculate the company’s qualified research expenditures, which totaled above $7.8M over the four-year span.
The study generated over $680k in federal credits and $122k in state credits, which greatly assisted in offsetting the built-in gains tax.