| Residual Cost Segregation Estimation Approach: The residual cost segregation estimation approach is an abbreviated method in which only short-lived asset costs (e.g., 5- or 7-year property) are determined. Short-lived asset costs are added together and then subtracted from the total project cost. The remaining or “residual” cost is then simply assigned to the building and/or other long-lived assets. Although this method is simpler and less time consuming than the engineering approaches, it can also be less accurate. It should be recognized that this method generally does not reconcile project costs. In general, residual costs are not estimated or checked for reasonableness. A proper and “reasonable” residual cost should always be determined and then added back to the total of all short-lived asset costs to check if the total project cost is reconciled. It should also be understood that different estimation techniques for short-lived assets can produce a skewed result in favor of § 1245 property (e.g., § 1245 property based on single-unit costs for high quality construction, while the building is based on gross square footage). 1 1 Internal Revenue Service, Cost Segregation Audit Techniques Guide, Chapter 3 Cost Segregation Methodologies (accessed January 2, 2008); available from http://www.irs.gov/businesses/article/0,,id=135052,00.html#8.
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FOUNDERS
Chuck Evans
President & CEO
Chuck graduated from Metropolitan State University with a B.A. in Business Administration and a minor in Project Management. He has over 18 years of professional experience in construction, project management, commercial development, accounting and sales. He has co-authored articles on cost segregation and has been invited to speak to many CPAs, Commercial Brokers, and others serving the commercial real estate industry.
Chuck has been involved in cost segregation projects across all industries including; manufacturing, office, warehouse, distribution, medical office, multifamily housing, and many more. Chuck serves on the City of Lino Lakes Park Board and is a member of the Minnesota Shopping Center Association and the Minnesota Commercial Association of Realtors. Chuck enjoys helping clients significantly increase their cash flow, and maximize their Return on Investment (ROI) through engineering based cost segregation.
E-Mail: Chuck@costsegleader.com
Doug Mortenson, CPA
Chief Financial Officer & Treasurer
Doug graduated from the University of St. Thomas with a B.A. in Business Administration and a concentration in Accounting. Doug has over 16 years of professional experience in public accounting and in industry, where he has served as a Controller and Director of Finance. Doug has co-authored articles on cost segregation and has been invited to speak to CPA firms, Commercial Brokerage firms, and other groups and associations serving the commercial real estate industry.
Doug has been involved in cost segregation projects across all industries including; manufacturing, office, warehouse, hotel/motel, multifamily housing, and many more. He is a member of the American Institute of Certified Public Accountants, the Minnesota Society of Certified Public Accountants, the Minnesota Shopping Center Association and the Minnesota Commercial Association of Realtors. Doug prides himself on understanding his client's needs and helping them take advantage of the benefits of cost segregation when it makes sense.
E-Mail: Doug@costsegleader.com
| Residual Studies |