| The Cost Segregation Process
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Review
of Cost Detail
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This review includes, but is not limited to, the
general contractor’s application for payment, construction
invoices, change orders, depreciation schedules, and
appraisals, if these documents are available. |
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Inspection
of Facility |
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We will inspect the facility in order to gain a full understanding of its use and condition, and to gather information that further supports the classification of
capitalized costs into their appropriate class lives. |
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Photograph & Document |
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Photographs are taken of qualifying construction components
and are included in our report. |
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Review of Blueprints |
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All available blueprints are reviewed, and the performance
of quantity take-offs and cost estimates is evaluated for personal
property not segregated in other cost information. |
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Cost Reconciliation |
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A reconciliation of all construction costs and estimates
of the actual amounts incurred by tax life is conducted. This step
includes adjusting estimates to account for location, time, and physical
condition. We
also perform an allocation of soft costs to any direct
cost in each category to maximize your total benefits. |
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Preparation of a Report |
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This report complies with the IRS standards stipulated in
the Audit Techniques Guide for Cost Segregation Studies.
Our firm is comprised of engineers and CPAs who thoroughly evaluate
and identify
areas of tax savings for our clients. |
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Fixed Asset Studies |
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Similar to a Cost Segregation Study, a Fixed Asset Study evaluates a company's assets and assigns misclassified fixed assets to appropriate tax lives. While a Cost Segregation Study focuses on buildings, a Fixed Asset Study encompasses all fixed assets a company owns. This results in immediate and substantial cash flow by accelerating deductions on assets that were previously placed in service with improper tax lives.
A proper Fixed Asset Study requires not only tax expertise, but also an understanding of engineering and construction concepts. A team of qualified engineers visit client locations to inspect and photograph assets, identify their use and function, and review supporting documentation including purchase orders, invoices, and blueprints. Our team then calculates the "catch-up" adjustments using our proprietary software. Our deliverable is a comprehensive report that includes all required documentation per IRS guidelines, including technical memos, supporting case law, detailed asset schedules, and cost records for reclassified property. Our thorough analysis ensures that all assets are accurately classified in order to optimize tax savings.
Fees for Fixed Asset Studies can be either flat fees or contingent upon our findings.
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