Recreational Resort Case Study

Recreational Resort Tax Strategy Case Study

This case study reviews The Capstan Course taken to assist the owner of a recreational resort with some innovative tax strategies.

Recreational Resort Tax Strategy Case Study

Consult

A local developer with experience in the recreation industry recently acquired a large ski resort and golf club.   Wanting to make the most of their significant investment, the owners approached the Capstan team for assistance in maximizing tax savings through the acceleration of deductions.

Recommend

After reviewing the scope of the project and discussing the owner’s future plans for the property, Capstan recommended Advanced Cost Segregation Study (ACSS). This thorough cost segregation analysis provides an enhanced level of pricing detail. This level of detail on base-building assets is well-suited for the maximization of depreciation deductions from year one. In addition, a complete Unit of Property analysis was performed. And so, allowing for a detailed assessment of historic assets and breakdown of building systems. Furthermore, this combination of studies allowed the client to perform extensive renovations. Creating a complete and accurate assessment of all cumulative assets pre-renovation provides the client with a powerful tax-savings tool.

Study

The tremendous size of the grounds and the varied nature of the buildings posed a unique challenge to the Capstan engineer. The property was vast. It contained retail and office spaces, restaurants, two banquet facilities, conference center, gym with sauna, luxury spa, full-service hotel and even a “slope-side pub.” Unusually, the ski area and golf green were situated on completely separate parcels of land, further contributing to the size of the project. The ski area consisted of almost 30 slopes and trails. The golf green measured over 6,000 yards and maintained by an extensive underground irrigation system. In short, the facility was large and an elaborate mosaic of multiple complex property types.

Fortunately, Capstan engineers are trained to deal with unusual properties in an efficient manner. The lead engineer completed her meticulous assessment of the entire property in a timely fashion. The owners purchased the resort at a deep discount. In short, they were very pleased that Capstan successfully moved over 35% of the depreciable basis out of 39-year class life. Additionally, they were pleased to have compiled the most accurate and complete asset listing possible. Thus allowing them to position themselves for potential future savings through partial asset disposition and/or reclassification of assets.

Support

Capstan issued “The Capstan Warranty” to the client which provides audit support up to the field agent level at no additional cost should the project ever be audited by the IRS. Capstan will also provide guidance to the owners in maximizing tax savings post-renovation in future.