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IRS Cost Segregation Requirements & Our Experience
What does the IRS say about using Cost Segregation?
Quotes from the IRS's Cost Segregation Guide "In order to compute depreciation using proper class lives and recovery periods, assets must be assigned to the proper asset classes. Cost segregation studies generally produce listings or groups of assets, based on asset classes under ACRS (Accelerated Cost Recovery System) or MACRS (Modified Accelerated Cost Recovery System). " (Click here to open IRS's Website for Source of Quote) "In order to calculate depreciation for Federal income tax purposes, taxpayers must use the correct method and proper recovery period for each asset or property owned. Property, whether acquired or constructed, often consists of numerous asset types with different recovery periods. Thus, property must be separated into individual components or asset groups having the same recovery periods and placed-in-service dates in order to properly compute depreciation." (Click here to open IRS's website for source of quote)
Requirements for a Complete & Accurate Cost Segregation Analysis:
In 2004 the IRS first published the Cost Segregation Audit Guide for its internal auditors that clearly illustrates the importance of corporations and property owners using a qualified firm experienced in cost segregation studies. (Click Here to Open in New Window: IRS Cost Segregation Audit Guide) With over twenty years in the engineering and accounting firm environments, Griffin Valuation Group Ltd. has the experience and qualifications needed to surpass all IRS requirements. All the experienced professionals required are in one organization. Griffin Valuation Group, Ltd. uniquely over-satisfies the IRS's requirement of having qualified and experienced cost segregation specialists perform these studies alongside the tax expertise of our CPAs.
It is imperative to have the combination of a CPA in addition to experts in construction methods, property valuation and construction cost estimating. One or the other alone cannot do a complete and thorough product with the maximum tax benefit as required by the IRS. We provide the complete team !
Our methodology follows professional engineering and cost estimating procedures approved by the IRS. We fully support our findings and utilize a conservative and comprehensive approach using documented case law and letter rulings. In the unlikely event of an audit, we will provide audit support at no additional charge. Our proposal will provide more details. Click on our Links page, in addition to our Cost Segregation page, to see actual IRS reference material on why and how they prescribe the use of cost segregation to properly depreciate assets. Our goal is always to maximize our clients' depreciation allowances while controlling the level of audit risk.
Griffin Valuation Group's Experience: We offer a complete package of services which are interrelated to produce maximum cost savings and tax benefits. This provides our clients with reduced expenses from the efficiency of using one firm and one set of experts. For example, when a cost segregation study is done, it is most cost effective to ensure the property is fairly valued for local property tax assessment purposes at the same time. This avoids bringing in a second firm later and doubling your expenses. Lowering real and personal property taxes is perhaps the easiest way to immediately reduce corporate expenses. Increasing cash flow through accelerating your depreciation expense is also a substantial benefit to the bottom line. These tax savings can be solved at one time by one firm with reduced expense and drastic time savings. Prior clients who have enjoyed substantial tax benefits include:
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