Our Approach
We apply professional engineering and cost estimation procedures to determine the cost basis of our client’s real estate for federal and state income tax depreciation purposes. There are eight steps in our Cost Segregation process.
Obtain and review a schedule summarizing the general contractor’s construction and owners’ costs, the contractors’ pay requests, copies of change orders and dollar amounts associated with each item, and copies of all invoices paid by the owner to subcontractors and vendors other than the general contractor.
Analyze and reconcile project-related cost information to the owners’ general ledger and tax asset accounting records.
Our engineers review the site work, architectural, structural, mechanical, electrical, construction blueprints, and equipment layout drawings to develop a thorough understanding of the construction project.
Our engineers conduct an on-site visit and inspection of the facility to identify and reconcile our review of the blueprints.
Perform our cost segregation engineering study from the blueprints, contractor cost detail or other documentation.
Allocate the general contractor’s indirect project costs to each estimated take-off. Next, the owner’s indirect costs are allocated to each estimated take-off.
Reclassify each individual Section 1245 and 1250 component into the proper asset classification according to Rev. Proc. 87-56 for federal and state income tax purposes.
Document our findings and engineering methodology in our cost segregation study report.
How It Works
1
You will fill out a simple and quick one-page information form.
Please click HERE for the form.
If you already filed taxes with your building, we will need a copy of the federal tax depreciation schedule to review.
2
We run a free analysis.
We run an analysis to determine the potential tax benefit and the study cost and email it back to you for discussion with your CPA.
3
We perform a tax study.
If you elect to move forward and take advantage of the tax benefit, we will perform the tax study and provide the results to your CPA to apply the schedules to your tax return.