RB Engineering, Inc.
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Structural Engineering Firm |
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Cost Segregation Division What is a Cost Segregation Study? Under United States tax laws and accounting rules, cost segregation is the process of identifying personal property assets that are grouped with real property assets, and separating out personal assets for tax reporting purposes. A cost segregation study (CSS) identifies and reclassifies personal property assets to shorten the depreciation time for taxation purposes, which reduces current income tax obligations. A Cost Segregation Study (CSS) is a detailed analysis of all costs associated with the acquisition or construction of a building. The purpose of a CSS is to identify and price nonstructural elements and exterior site improvements that may be properly classified with a 5-, 7-, or 15-year depreciable life. As you decrease the recovery period (depreciable life), you increase your annual depreciation deduction, which increases cash flow by decreasing tax expense. What is a “Quality” Cost Segregation Study? A "quality" cost segregation study is a study that is both accurate and well-documented. Quality studies greatly expedite the Service’s review, thereby minimizing audit burden on all parties. A quality study contains a number of characteristics, which are set forth by the IRS guidelines.
Who Can Benefit From a Cost Segregation Study? Any company or individual that has purchased or modified an existing commercial or multifamily residential building, or is planning to construct a new building can benefit from a CSS. Real property eligible for cost segregation includes buildings that have been purchased, constructed, expanded or remodeled since 1987. A study is typically cost-effective for buildings purchased or remodeled at a cost greater than $500,000. A cost segregation study is most efficient for new buildings recently constructed, but it can also uncover retroactive tax deductions for older buildings which can generate significant short benefits due to "catch-up" depreciation. Who Can Perform Cost Segregation Studies? The IRS has published guidelines for the determination of a quality CSS. These guidelines require the CSS be performed by persons with expertise and experience. Expertise is defined as requisite knowledge of both the construction process and the tax law involving property classifications. While CPA’s generally know the tax law, they likely do not have the necessary knowledge of the construction process to conduct a CSS which is acceptable to the IRS. The IRS standards for a quality CSS are high and acceptance of the CSS by the IRS is dependent upon meeting those standards. RB Engineering, Inc. has Experience with All Commercial Real Estate Properties including:
At RB Engineering, Inc. we employ engineers who have the requisite knowledge of the construction process and the tax laws involving property classification. Together, these professionals closely coordinate each project and carefully follow the strict IRS standards to maximize your tax savings.
Are you ready to maximize your cash flow? By conducting a cost segregation study, your company can recognize significant tax savings in real, permanent dollars. Why Choose RB Engineering, Inc? RB Engineering, Inc. provides attention to detail on your projects and is committed to providing you with an accurate and reliable study. RB Engineering, Inc. has the knowledge and experience to complete your project and only utilizes engineers with a thorough understanding of the IRS guidelines. RB Engineering, Inc. does not outsource any services. Our strict quality control process is done entirely by our team and includes a technical and tax review on every project to ensure meet or exceed IRS standards. Contact Us: RB Engineering, Inc. provides a free estimate of benefits. By providing us with a tax depreciation schedule, or in the case of new construction, a G702/703 form, we can quickly estimate your cash savings. |
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