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IRS: Cost Segregation Audit Techniques Guide IRS: Detailed Engineering Approach The "Detailed Engineering" Approach uses costs from contemporaneous construction and accounting records. Construction-based documentation, such as blueprints, specifications, contracts, job reports, change orders, payment requests,and invoices are used to determine unit costs. Cost Segregation Engagement - Terms & Conditions

Major Retail Mall

Engineering Based Cost Segregation Study
Federal Way Crossings
Major Retail Center
New Construction
Purchase Price: $44,597,862 (excludes land)
Gross Depreciation Benefit: $11,989,527
Net Cash Benefit: $4,196,334.4 (Assuming a 35% ETR)

Note: Tax Benefit has a 20 year carry forward
Asset Class MACRS
Asset Life
Original
Allocation
Original
Percentage
Allocation
After CSS
After CSS
Percentage
Personal Property 5 Years 0.00% $6,275,683.62 14.07%
Personal Property 7 Years
Land Improvements 15 Years $0 0.00% $5,713,844.24 12.81%
Real Property 39 Years $ 100% $32,608,334.59 73.12%
Total Depreciable 100.00% $44,597,862.45 100.00%
Total Project Costs $44,597,862.45


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