We price our studies based on the time and materials involved in completing the project. We consider the building type, size, and complexity and then make a fee determination based on our past projects.
If you provide some basic building information, we can prepare a no-cost, no-obligation, initial evaluation. We will also include a cost vs. benefit analysis that will lay out the expected benefits and the flat fee required to complete the study. You can then decide if you would like to move forward with the study based upon the anticipated return on investment.
While you can have a study done any time after you purchase your building, for maximum tax benefits, we recommend immediately after or within the first year of:
If you purchased, constructed, expanded, or remodeled your building since 1987, you may be able to benefit from cost segregation. A Cost Segregation Study done on a property for which a tax return has already been filed is called a “look-back” study. A look back study will correctly reclassify all building components and allow you to catch up on all attributable depreciation in the current year.
Yes. We will defend our findings at no charge to our clients. We will even cover any travel expenses if necessary.
In 2004, the IRS issued the Cost Segregation Audit Techniques Guide, which listed engineering-based cost segregation as the preferred method of conducting studies.
Many cost segregation firms claim they are providing Engineering-Based Cost Segregation when, in truth, they are providing their clients with sub-standard residual or hybrid studies. A residual study is an abbreviated method that assigns detailed project costs to a building’s short life assets and then lumps the remaining basis into the 39-year depreciable life classification. This means the client will be unable to retire any long-life assets further down the road without having a new study appropriately done or risk an IRS audit.
An accurate Engineering-Based report will detail the remaining long-life assets just as it does 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 an actual engineering-based study. If you are not sure, contact us, we are always willing to help.
Cost Segregation is a specialty service requiring extensive knowledge of construction methods, engineering, and the Internal Revenue Code. Most CPA firms do not have the cost segregation specialists on staff to perform the in-depth studies. But we work with CPAs every day to provide the engineering resources and documentation necessary to provide this valuable service to their clients like you. We will be more than happy to work with yours!
Yes! A correctly performed engineering-based cost segregation provides a detailed breakdown of the building components. It assigns a cost basis to all building components, including the parts remaining in the long life 39-year category. This detailed information provides the ability to retire assets that are removed or replaced during the property’s depreciable life.
A correctly performed Engineering-Based Cost Segregation Study will not raise red flags or cause an audit. However, if you are randomly selected for an audit, your Cost Segregation Study may be subject to the audit as well. Therefore, it is essential to use a reputable cost segregation provider to stand behind their work in any audit situation. Our industry-leading studies are designed and packaged to stand on their own. In the case of an audit or if the IRS raises any questions, we will defend our findings at no additional fee.
