After the IRS issued the Cost Segregation Audit Techniques Guide (CSATG) in 2004, and listed Engineering Based Cost Segregation as the preferred method of conducting studies, many Residual Cost Segregation providers began claiming they use Engineering methods. 

Currently, there are several cost segregation firms who claim to be providing Engineering Based Cost Segregation, when in reality they are providing their clients with Residual studies.  A Residual study is an abbreviated method that simply assigns detailed project costs to the short life assets and then lumps the remaining basis into the 39 year depreciable life classification.

A true Engineering Based Report will have as much detail for the remaining long life assets as it does for the short life assets.  This provides the opportunity to retire short and long life assets in the years following the study.  It also provides an accurate reconciliation of all project costs and reduces exposure to IRS scrutiny. 

Before deciding on a provider, ask to see a sample of their final report, and make sure they are providing a true Engineering Based Study.

It depends.  We price our studies based on the time and materials involved to complete the project.  We take into consideration the building type, size and complexity and then make a fee determination based on our past projects.  The only way to know for sure is to provide us with some basic building information and allow us to provide a free, no cost, no obligation initial evaluation and prepare a Cost vs. Benefit analysis that will layout the expected benefits and the flat fee required to complete the study. You can then make an educated decision whether or not to move forward with the study based upon the anticipated return on investment.

We will conduct a free, no cost, no obligation initial evaluation and prepare a Cost vs. Benefit analysis that will layout the expected benefits and the flat fee required to complete the study. You can then make an educated decision whether or not to move forward with the study based upon the anticipated return on investment.

NO.   A properly performed Engineering Based Cost Segregation will not raise red flags or cause an audit. However, if you are randomly selected for an audit, it is very possible that your Cost Segregation Study will be subject to the audit as well.  Therefore it is important to make sure you are using a reputable cost segregation provider that will stand behind their work in any audit situation.

YES.  A properly performed Engineering Based Cost Segregation provides a detailed breakdown of the building components and assigns a cost basis to all building components, including the components remaining in the long life 39 year category.  This detailed information provides the ability to retire assets that are removed or replaced during the depreciable life of the property.

If you purchased, constructed, expanded or remodeled your building since 1987, you may be able to benefit from cost segregation.    A cost segregation study performed on a property for  which a tax return has already been filed is known as a  a Look-Back Study.  A look back study  will properly reclassify all building components and allow you to catch up all attributable depreciation in the current year. 

We can conduct a free, no cost, no obligation initial evaluation and prepare a Cost vs. Benefit analysis that will layout the expected benefits and the flat fee required to complete the study. You can then make an educated decision whether or not to move forward with the study based upon the anticipated return on investment.

Yes.  We will defend our findings at no charge to our clients.  We will even cover any travel expenses if necessary.