Assume you built a 40,000 square-foot manufacturing facility with construction costs totaling $2 million; and 20% of the total construction costs can be segregated into 5-year property and 10% can be segregated into 15-year property. The net present value of federal tax savings based on current federal tax law, a 10% present value factor and a 34% corporate tax rate is as follows.
Depreciation:
| With Cost Segregation | Without Cost Segregation | |
| Year 1 | $337, 308 | $25,640 |
Net Present Value of Tax Savings:
| Year 1 | $114,685 |
| First 6 Years | $149,327 |
| 40 Year Life | $125,600 |
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