ABC Company Cost Segregation Study Proposal Overview Analysis
Cost Segregation Studies Overview What? Cost Segregation is an IRS-approved process of identifying personal property assets that often get buried or lumped together within the Real Property asset category. By undergoing a cost segregation study, these personal property assets are reclassified to the shortest possible depreciable life to enable the real estate owner to maximize his or her tax depreciation situation, thereby reducing the current income tax obligations.The tax savings generates cash flow that owners can use to reinvest in the business, purchase more property, apply to their principle payment or spend on themselves. How? Cost Segregation Services, Inc. (CSSI), an independent third party, performs an engineered cost segregation study on your commercial property. Through the study CSSI engineers identify and reclassify segments of your real property into personal property. This allows you to accelerate the depreciation of your building and/or renovation into five-, seven- and 15-year categories rather than the conventional 27.5- and 39.5-year schedules. Five- and seven-year items include decorative building elements, electrical for dedicated computer equipment, and carpet. Fifteen-year items include site utilities, landscaping and paving.
CSSI Synopsis CSSI is the premier engineering company providing cost segregation studies for U.S. businesses. We have completed over 6,000 studies nationally. Focused Independent Compliant Our engineering background allows us to provide not only the best possible results, but also strictly adheres to all IRS guidelines and recommendations. In addition, we constantly monitor changes to stay up to date on the most current IRS cost segregation rules and regulations. We are engineers singularly focused on cost segregation. Our goal is to support you and your CPA with the most accurate results so you can realize maximum savings and increased cash flow. CSSI is classified as an independent engineering specialist meeting the exact specifications stated by the IRS in regard to commercial property owners performing cost segregation studies.
Property Analysis Summary These Savings are based on an estimate of 10 locations.
Net Present Value Summary Double Click Icon To View Individual NPV Breakdowns
Overview Project application for Cost Segregation of ABC Company commercial property facilities Study cost to include: • All cost of travel • All related engineering costs • Study to be provided for all buildings on property • Study to be coordinated with ABC Company project and accounting personnel • Completed cost segregation study document for ABC Company depreciation accounting application
Jan. 3, 2011 Initiate Study Jan. 3 – Jan. 17 Initiate Site Visits & Collect Data for all Properties Feb. 7, 2011 Complete Engineering Analysis Feb. 7 First Review Date of Draft Review with Tax Consultants Feb. 14, 2011 Delivery of Completed Study Cost Segregation Study Timeline Cost Segregation Study in Progress… Start Date, Jan. 3, 2011------------Feb. 14, 2011 Completed Study Review, Feb. 7, 2011----------------------------------------Feb. 14, 2011
Initiate Study • Agreement: Engagement letter approval • Review of project cost system with Project Management • Schedule Site Survey of completed projects • Review cost information for each location • Request and contact client coordinator
Site Survey • Validate and review source information from client coordinator for each location • Complete site survey of all properties • Review any changes made to project definition for project • Review planned completion timetable • Review accounting methods for asset definition
Study Review • Sample Report Project completed • Review of completed cost detail • Review total site cost detail • Review accounting methods for asset definition • Gather final data for completion of cost segregation study
Cost Segregation Study ReportFinal Review • Review Draft, Feb. 17, 2011 • Review completed draft • Include updated documentation • Review results with tax professionals • Final Report, Feb. 24, 2011 • Deliver cost segregation report • Return any data and files
IRS Guideline: “For A Quality Study” • Preparation By an Individual with Expertise and Experience • Detailed Description of the Methodology • Use of Appropriate Documentation • Interviews Conducted with Appropriate Parties • Use of Appropriate Nomenclature • Use of a Standard Numbering System • Explanation of Legal Analysis • Determination of Unit Costs And Engineering “Take-Offs” • Organization of Assets Into Lists or Groups • Reconciliation of Total Allocated Costs to Total Actual Costs • Explanation of the Treatment of Indirect Costs • Identification And Listing Of Section 1245 Property • Consideration Of Related Aspects (e.g. IRC §263A. Change in Accounting Method And Sampling of Techniques)
CSSI Report: Outline of Contents • Executive Summary • The Study • Scope of Study • Overview • Methodology • Investigation and Evaluation Certificate • Engineer Qualifications • Cost Summary • Cost Detail • Exhibits – Select photographs from site visit and architectural drawings.
For years, CSSI has been delivering quality, affordable, engineer-based cost segregation studies to a wide range of individuals and businesses. Our team of experts can help easily apply the results to your company owned locations and work with you and your tax professional to assure successful results. In addition, our national coverage and expertise allows us to work with customers and properties across the United States.
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