McGuire Sponsel has a wealth of experience in conducting Cost Segregation studies for the hotel and resort industry. Whether it is a stand-alone nationally branded hotel or a luxurious resort, a cost segregation study can be a fantastic tax strategy. Our engineers focus on moving assets from a 39-Year depreciable life to 15 and 5-Year asset lives by working to identify and quantify items like carpet flooring, decorative millwork, kitchen plumbing, site paving, and swimming pools. Due to the high volume and ever-revolving foot traffic, these facilities undergo constant improvements and maintenance. As a result, many of the costs could be classified as a repair expense under 263a Repair Regulations.
In addition, newly constructed or renovated facilities in excess of 30,000 square feet can qualify for additional benefit by conducting a 179D study. This focuses on energy efficient improvements made to the building envelope, HVAC, and lighting systems. McGuire Sponsel takes a “big picture” approach with every project to deliver maximum benefit.
Success Story: Current Year New Construction
The experts at McGuire Sponsel reviewed an $11 million hotel located in South Carolina. Our team physically inspected the facility and identified personal property such as guestroom cabinetry, decorative millwork, vinyl tile flooring, laundry chutes, swimming pool, and decorative lighting. Our study resulted in a $527,879 increase to the first year cash flow.
Success Story: Current Year Renovation
McGuire Sponsel reviewed a resort located in Florida that was undergoing a $20 million renovation in 2017. While on site, our team determined that portions of the renovation met the qualifications of Qualified Improvement Property. The initial result was an increase to the first year cash flow of $1,511,105. In addition, our team of engineers identified over $4 million of assets with a remaining tax basis of $3.4 million were partially disposed due to the renovation. The partially disposed assets generated an additional increased cash flow of $1,330,560 in 2017.