Your commercial property has assets which have probably been overlooked – per the IRS. Through our cost segregation studies, we work to uncover potential tax savings and increase cash flow through reclassification and depreciation of property. ETS provides a “Detailed Engineering” review as part of our reporting process and works seamlessly with the IRS and your CPA firm for minimal disruption to your business.
A cost segregation study is a federal income tax tool that increases your near term cash flow, in the form of a deferral, by utilizing shorter recovery periods to accelerate the return on capital from your investment in property. Whether newly constructed, purchased or renovated, the components of your building may be properly classified, through a cost segregation study, into shorter recovery periods for computing depreciation studies. The study carves out, into 5, 7 and 15 year lives, certain qualifying portions of your building that are normally buried in 39 or 27.5 year categories.
The following identifies what Engineering Tax Services will provide within your study:
- Our Steps to a Cost Segregation Study: Free – No Risk Initial Review will determine if you would like to proceed.
- ETS will evaluate your current tax status and future business plans to determine the feasibility and applicability of a Cost Segregation Study specifically for your project.
- ETS will then evaluate the building’s construction costs by component or systems.
- ETS will then review the project’s/facility’s construction documents, including as-built drawings and project specifications.
- ETS will visit the facility/project to determine and identify how the components and systems are utilized – as well as to document the systems and components.
- ETS will provide a “Detailed Engineering” review of the assets including special purpose mechanical and electrical systems, decorative finishes, site improvements, and any process related to and special purpose construction.
- ETS then classifies or reclassifies each building component into the appropriate tax life as prescribed by IRS guidelines. ETS identifies and allocates indirect costs to each asset.
- ETS compiles a written report with the asset detail supporting the reclassifications and completes the necessary tax form(s).
To register for a complimentary Cost Segregation webinar, click here.
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