Hospital Cost Segregation Case Study
No Cost Segregation Study
Total Depreciation
$101,074
Cost Segregation Study
Total Depreciation
$2,105,238
5 Year Assets
15 Year Assets
39 Year Assets
Total Tax Benefits
$601,249
Property Type
Medical
#Of Floors
3
Building Cost
$4,505,000
Square Feet
12,368
Lot Size
.34
TOP DEPRECIATED ASSETS
Why is Cost Segregation Beneficial to Hospitals?
Depreciation for Specialized Equipment
Hospitals have a significant amount of specialized equipment, including medical machinery, diagnostic tools, and other technology-intensive assets.
Cost segregation allows hospitals to identify and reclassify these assets for accelerated depreciation.
By depreciating these assets over shorter recovery periods (e.g., 5, 7, or 15 years), hospitals can benefit from increased tax deductions in the earlier years of ownership, improving cash flow.
Technology and IT Systems
Hospitals rely heavily on technology for patient records, diagnostic equipment, and communication systems.
The hardware and software associated with these systems can be identified and reclassified for accelerated depreciation, aligning with the shorter life cycle of technology assets.
Proper Asset Management
Cost segregation studies provide a detailed breakdown of a hospital's assets, facilitating better asset management, maintenance planning, and financial reporting.
Specialized Building Components
Hospitals have unique building components, such as specialized flooring, lighting systems, and HVAC systems designed for healthcare environments.
Cost segregation helps differentiate these components, allowing for accelerated depreciation and increased tax savings.
Medical Facilities & Laboratories
Cost segregation allows hospitals to differentiate between various areas within the facility, such as medical laboratories, patient rooms, and administrative spaces.
This differentiation enables hospitals to optimize depreciation based on the specific assets in each area.
Renovations and Expansion Costs
Hospitals often undergo renovations, expansions, or facility upgrades to accommodate changing healthcare needs, comply with regulations, or improve patient care.
Cost segregation can be applied to identify and segregate the costs associated with these improvements, leading to faster depreciation and immediate tax benefits.