|
The 12
questions
you should
ask your
Cost
Segregation
specialist
The Cost
Segregation
Group offers
answers to
the
questions
many people
are asking
before they
get involved
with a cost
segregation
study. For
those
looking to
get involved
with the
Cost
Segregation
Group here
are some
things to
know about
cost
segregation
studies.
1) The first
of many
questions
people ask
is how long
does it take
the Cost
Segregation
Group to
complete a
cost
segregation
study?
A: From the
time we
receive all
of the
appropriate
documentation,
a cost
segregation
study
normally
takes about
60 days.
2) What
material is
needed for
the Cost
Segregation
Group to
complete a
cost
segregation
study?
A:
Ideally, we
would like a
full set of
construction
plans, final
AIA
application
and
certification
for payment
document or
other cost
information,
current tax
depreciation
records,
building
cost budget
information,
change
orders,
direct or
indirect
costs paid
by the owner
not included
in other
documents,
and other
information
depending
upon the
project.
3) But
what if you
don’t have
all the
necessary
materials,
can a cost
segregation
study still
be
performed?
A:
Yes, the
Cost
Segregation
Group’s
accounting
and
engineering
specialists
can do an
extensive
site visit.
They will
measure and
estimate
using
current
accepted
costing
techniques
and pricing
guides to
determine
the costs
that qualify
for shorter
recovery
life
periods.
4)
Can I use my
own
engineers
and
accountants?
A:
From our
experience,
it is most
beneficial
and cost
efficient
for us to
use
specialists
who are
familiar
with and
specialize
in cost
segregation
work. They
understand
the
components
that qualify
and know how
to document
and
substantiate
their work.
Consequently,
their work
also better
withstands
IRS scrutiny
and they are
able to
assist with
any IRS
challenges.
5)
What about
the cost of
a
feasibility
study?
A:
Simple, a
feasibility
study is
free.
6)
Can the Cost
Segregation
Group to
explain the
concept of
Net Present
Value (NPV)?
A:
Net present
value is the
calculation
of the
present
value of tax
savings
achieved
over a
39-year or
27.5 year
depreciation
period (life
of the
asset).
7)
Another
popular set
of questions
is if my
current CPA
can do a
cost
segregation
study for
you? And,
can the Cost
Segregation
Group work
with my
current CPA
to get a
cost
segregation
study done?
A:
Not all CPAs
are
experienced
in cost
segregation
work. If
your CPA is
not
experienced
in this
area, we
will gladly
work with
them on a
consulting
basis to
complete the
work for
you. We
currently
have
relationships
established
with several
firms who
call us in
to do this
type of work
for their
clients
without fear
of our
assuming
their client
relationship.
8)
Do my
chances of
being
audited
increase
once a cost
segregation
study is
completed on
my property?
A:
It is
difficult to
know what
might
trigger an
audit. In
our
experience,
the chance
of being
audited does
not
substantially
increase
after a cost
segregation
study.
9)
Will
professionals
at the Cost
Segregation
Group be
available to
assist in
the event of
an audit?
A:
Yes, The
Cost
Segregation
Group will
be available
to assist in
the event of
an audit.
In doing the
cost
segregation
study our
focus is to
create
documentation
and support
for our
conclusions
so that they
are easily
communicated
and resolved
with the
IRS.
10)
What does a
cost
segregation
study cost?
A:
We charge a
fixed fee
for cost
segregation
studies, so
you know the
total cost
of the study
upfront.
The fee can
be impacted
by how large
or small the
real estate
project is.
In addition,
the
location,
accessibility,
and quality
of the
records and
documents
impact the
ultimate
cost.
11) What
items are
classified
as personal
property in
a cost
segregation
study, does
that
increase my
personal
property
tax?
A:
In general,
a cost
segregation
study will
not impact
personal
property
classifications.
The work
done in a
cost
segregation
study is for
depreciation
purposes
only. The
classification
for
depreciation
purposes
does not
change how
the property
is
classified
under the
personal
property tax
laws of the
jurisdiction
where the
property is
located.
However, we
would
recommend a
review of
the
applicable
personal
property
statute.
12)
Who do I
call for
more
information?
A:
For more
information
on cost
segregation
studies,
contact
Cathy Harris
at The Cost
Segregation
Group at
757-533-4118
or email
charris@costsegregationgroup.com
www.costsegregationgroup.com |