Find answers to the most commonly asked questions about cost segregation services. If you don’t find the answer you’re looking for, we’re here to connect with you directly.
Does CTI have a “qualified engineering” staff?
Absolutely. All of our cost segregation specialists meet the standards of a qualified engineer, as defined by the IRS Cost Segregation Audit Techniques Guide. Most have additional practical engineering experience in the design and construction trades.
May my CPA perform a cost segregation study for me?
The IRS states that those with a complete understanding of engineering methodologies, construction pricing and relevant legal citations must complete a quality cost segregation analysis. Typical CPAs may have some knowledge or experience in these areas, but lack the expertise in construction and real property. CTI has the necessary skills and experience in each professional field, as is required by the IRS.
Have you ever gone through a cost segregation audit with the IRS?
Yes, several times, and with absolute success. We’ve never had our tax strategies overturned. We attribute this to our detailed documents that are written specifically to answer the IRS Cost Segregation Audit Techniques Guide. The audit guide includes a section that specifically defines the “Principle Elements of a Quality Document” and we follow the outlines precisely. In fact, our table of contents matches the audit guide so that an auditor may easily reference it.
Furthermore, we service several private equity funds that have many investors to satisfy. They engage aggressive internal auditors, such as Deloitte and Ernst & Young, and we have satisfied their every condition.
Does your service fee include support if there is a cost segregation audit?
Yes. Again, our first line of defense is our quality document. Even still, we stand behind our work and will be present to defend it.
When is the best time to perform a cost segregation analysis?
A cost segregation study may be performed at any time during the life of the property, regardless of the ownership duration. Newly constructed buildings, newly purchased properties, properties owned for several years or even properties being sold or liquidated are all candidates that may realize benefits.
Will a cost segregation study “red flag” me and increase my chances for an audit?
Absolutely not. An IRS attorney in Washington D.C. stated, “We are happy to see a cost segregation study performed on real estate. If the study’s quality is apparent, then we know that there is a much better chance for the assets to have the accurate class lives than if a tax consultant simply makes random guesses.”
What kind of building qualifies for a cost segregation study?
Any income-generating property or real estate is a candidate for a cost segregation study.
What are the typical fees for a cost segregation study?
There is no standard fee for a cost segregation analysis because each property is unique. The most important thing is to secure a competitive lump sum proposal upfront that does not consider the substantial cash benefits for the owner. Ask us for a no-obligation proposal or simple feasibility analysis. We not only provide a foremost cost segregation product, but we grow through referral and strive to keep our overhead low with true production efficiencies. Technology is our great partner and our fees are always reflective.
What happens if the IRS audits me and I have used the cost segregation method?
A CTI cost segregation study and report is organized and designed for the express purpose of answering the requirements of the IRS Audit Techniques Guide, which is the internal standard and “rule book” of the IRS for the cost segregation method.
Does depreciation undermine the benefits or cause cost segregation to be irrelevant?
No. Based on misdirected math, some tax consultants and building owners erroneously believe that depreciation “recaptured” at a property’s disposition overshadows the benefits. Ask us to explain the truth and show you the math behind it.
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