Drug Stores / Pharmacies
Drug stores and pharmacies share many qualities with traditional retail spaces. This is especially true of cost segregation, where there are significant sources of depreciation in both the interior and exterior. The pharmacy section of a drug store provides many short-life components by itself, while the rest of the store has the same opportunities as standard retail. The exterior has signage, the parking lot, and landscaping that can all be used in cost segregation.
When you use O’Connor for your cost segregation, you will see all aspects of your commercial property investigated for potential sources of short and long-term depreciation. O’Connor follows all mandates by the IRS when it comes to finding the most depreciation possible, and all units of property will be considered in the study.
While cost segregation studies can have a significant dollar amount attached, they usually offer a return on investment of 6-1 in just the first year. Under certain circumstances and escalators, this can be as high as 20-1. Please consult the table below to see real examples that O’Connor was able to do for drug store and pharmacy owners.
Sample Study Results
| Depreciable Basis | Purchase price | Purchase Date | Year of Study | 1st Year Tax Savings | Year 1 Payback | Initial 5 Years Tax Savings | 5 Year Payback |
|---|---|---|---|---|---|---|---|
| $2,737,553 | 2/1/2015 | 2015 | $68,547 | $27,148 | 9.6:1 | $142,798 | 51.3:1 |
| $4,336,070 | 2/1/2015 | 2015 | $105,208 | $41,662 | 14.7:1 | $223,088 | 79.6:1 |
| $4,815,243 | 3/1/2015 | 2015 | $125,963 | $49,881 | 17.6:1 | $250,631 | 89.3:1 |
| $4,505,000 | 12/1/2014 | 2014 | $49,540 | $19,618 | 6.4:1 | $305,349 | 101.0:1 |
| $4,488,542 | 5/1/2012 | 2012 | $140,949 | $60,608 | 21.3:1 | $287,827 | 102.0:1 |
Results
* Results from studies using mid-quarter depreciation convention due to timing of purchase and other factors.
NOTE: The above listed tax savings are based on a 39.6% tax rate for the owner.
