The team at McGuire Sponsel works with both national chain and franchise restaurants using Cost Segregation studies to reduce tax burdens. By accounting for items like decorative millwork, specialized electrical distribution, kitchen HVAC, and specialized plumbing, accelerated depreciation deductions can result in significant cash flow benefit. As it relates to renovations, the Refresh Safe Harbor can be a tremendously beneficial, yet complex tax strategy. Our experienced team will work hand in hand with the client to determine if this is a viable option.
Success Story: Current Year Renovation
The professionals at McGuire Sponsel performed a cost segregation study in 2016 for $3.8 million upscale pizza eatery in downtown Chicago. Our study identified short-life assets such as decorative millwork, hostess cabinetry, wipedown wall paneling, HVAC dedicated to kitchen equipment, and decorative light fixtures. In addition, we were able to classify much of the real property as Qualified Leasehold Improvements. The result was an increase to the first year cash flow of $792,606.
Success Story: Current Year Renovation – Refresh Safe Harbor
Our team was contacted to perform an analysis on a portfolio of restaurants undergoing renovations. Our specialists identified that a large portion of the improvements would be eligible for expensing under the Refresh Safe Harbor, as a repair under the Tangible Property Regulations, or as a result of the de minimis safe harbor. Based on our study, the client only had to recognize less than 10% on average as 39-year real property. The experts at McGuire Sponsel were able to showcase their knowledge regarding the complexities of multiple strategies to optimize the benefit for the client