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Contribute Service Information toCost Segregation plus1 Add What service information are you contributing? Service Description RFP Other Update which description section? Service DescriptionROIOther BenefitBenefit UtilizationIndustry PricingCommon Fee ScheduleOther CostsExpectations of ClientService RisksService Risk TimingService ProcessCommon Industries for ServiceAuthorities and ReferencesOther Comments Update which part of the RFP? EligibilityRecommendedOther SectionsOther Feedback Other feedback Service Provider Considerations & LimitationsOther Feedback Brief description of the service: * Accelerates the depreciation of buildings owned by the business (on balance sheet). Commercial buildings are most often depreciated evenly over a 39-year or 27.5 year period. With Cost Segregation, a portion of a building's depreciation from future years can be brought forward to the current year to increase cash flow. Expected range of ROI, if applicable: Varies widely. Median ranges from 10:1 to 100:1. Describe non-ROI benefits: Increased Federal tax deduction which increases cashflow or Net Operating Losses. Examples: Increased database security, lower audit risk, decreased legal liability. Describe the ability and timing of the business to utilize the benefits, if applicable: Benefit realized in the first year and often for the 5 - 10 subsequent years. For example, many federal tax credits will not be received for 3-6 months after filing an amended return, are applied as direct offset to a timely filed return, or are rolled over to to offset tax liability in future years. Credits can be utilized against tax liability, some can be used against payroll tax liability, etc. Describe the industry pricing of the service: See ROI. Examples: Contingency fee between 10-20% of the benefit calculated/received; Fixed fee based on estimated hours involved in delivery the service; etc. Describe common fee schedules: Provider dependent. Typical arrangements include (1) Full payment up front, (2) Progress payments, and (3) Full payment upon completion. Depending on the time of year, payments usually occur before benefit is realized. Examples: Contingency fee collected upon completion of service; Fixed fee collected in thirds, first at project commencement, second at certain milestone, third at service completion; etc. Describe what is expected from the client of the professional service: Business provides service provider with address of the building, specifications and drawings of the building, and the tax asset schedule from the most recent tax return or building costs for new constructions. Business also facilitates a site visit by the service provider. Examples: Time commitment from certain personnel, etc. Describe other costs to a client of the professional service not already described: Describe the risks of the service to the client: Cost Segregation is a low-risk tax position with low audit rates. Risk exposure occurs when Cost Segregation positions are either (1) not supported by documentation or (2) the segregation of building costs is incorrect. Examples: Amending tax returns extends the window for tax returns to be audited as well as certain filings raise the chance of audit, and audits for this service have mixed outcomes industry wide with 50% of audits resulting in the loss of some or all of the credit; etc. Describe the timing of risks of the service to the client: This tax deduction is not currently a red flag to the IRS. If an audit were to occur this would most likely happen, if at all, 2-3 years from the date filed. Examples: Referencing the above amending tax returns, audit risk generally is present 6 months to 3 years after filing a return. Audits themselves for this service may take 6 months to 1 year, appeals to unfavorable audit results may take another year, and lawsuits could add additional years to the resolution of an unfavorable audit. Describe the process for completing the service: Business provides service provider with documentation, access to building for the site visit cost segregation report will then be delivered to the client who will give this report to their tax provider to include with the tax return when filed. Examples: For many tax credits, the Provider requires accounting data and communication with the Client's CFO or accounting rep. Provider calculates the credit and prepares the filing. Client signs filing. Provider files credit. Describe the common industries of category of businesses that commonly receive this service: Applies to all real estate held for profit. List the authorities governing the service so businesses may do additional research, if applicable: Internal Revenue Code §167; IRS Publication 946; IRS Cost Segregation Audit Techniques Guide; Revenue Procedure (Rev. Proc.) 62-21, 1962-2 C.B. 418. Example: Tax credits can be found in the U.S. Code Title 26, Sections 21 - 52 as well as Treasury Regulation, Title 26, Sections 1.21 - 1.52. Other Service Description Comments Eligibility requirements comments: Service recommendation comments Other RFP comments Describe Provider considerations or limitations in providing this service. For example: Legal services can only be delivered under states' laws where the provider is licensed to practice. Cost Segregations require site visits, therefore some providers only service specific geographic areas. Any feedback not solicited above can be put here Or upload comments here Drop a file here or click to upload Choose File Maximum file size: 268.44MB plus1 Add minus1 Remove Brief description of the service: * Accelerates the depreciation of buildings owned by the business (on balance sheet). Commercial buildings are most often depreciated evenly over a 39-year or 27.5 year period. With Cost Segregation, a portion of a building's depreciation from future years can be brought forward to the current year to increase cash flow. Describe the service like you would to a customer. Field cannot be blank. If using the upload below, just say so in this field. Expected range of ROI, if applicable: Varies widely. Median ranges from 10:1 to 100:1. Describe non-ROI benefits: Increased Federal tax deduction which increases cashflow or Net Operating Losses. Examples: Increased database security, lower audit risk, decreased legal liability. Describe the ability and timing of the business to utilize the benefits, if applicable: Benefit realized in the first year and often for the 5 - 10 subsequent years. For example, many federal tax credits will not be received for 3-6 months after filing an amended return, are applied as direct offset to a timely filed return, or are rolled over to to offset tax liability in future years. Credits can be utilized against tax liability, some can be used against payroll tax liability, etc. Describe the industry pricing of the service: See ROI. Examples: Contingency fee between 10-20% of the benefit calculated/received; Fixed fee based on estimated hours involved in delivery the service; etc. Describe common fee schedules: Provider dependent. Typical arrangements include (1) Full payment up front, (2) Progress payments, and (3) Full payment upon completion. Depending on the time of year, payments usually occur before benefit is realized. Examples: Contingency fee collected upon completion of service; Fixed fee collected in thirds, first at project commencement, second at certain milestone, third at service completion; etc. Describe what is expected from the client of the professional service: Business provides service provider with address of the building, specifications and drawings of the building, and the tax asset schedule from the most recent tax return or building costs for new constructions. Business also facilitates a site visit by the service provider. Examples: Time commitment from certain personnel, etc. Describe other costs to a client of the professional service not already described: Describe the risks of the service to the client: Cost Segregation is a low-risk tax position with low audit rates. Risk exposure occurs when Cost Segregation positions are either (1) not supported by documentation or (2) the segregation of building costs is incorrect. Examples: Amending tax returns extends the window for tax returns to be audited as well as certain filings raise the chance of audit, and audits for this service have mixed outcomes industry wide with 50% of audits resulting in the loss of some or all of the credit; etc. Describe the timing of risks of the service to the client: This tax deduction is not currently a red flag to the IRS. If an audit were to occur this would most likely happen, if at all, 2-3 years from the date filed. Examples: Referencing the above amending tax returns, audit risk generally is present 6 months to 3 years after filing a return. Audits themselves for this service may take 6 months to 1 year, appeals to unfavorable audit results may take another year, and lawsuits could add additional years to the resolution of an unfavorable audit. Describe the process for completing the service: Business provides service provider with documentation, access to building for the site visit cost segregation report will then be delivered to the client who will give this report to their tax provider to include with the tax return when filed. Examples: For many tax credits, the Provider requires accounting data and communication with the Client's CFO or accounting rep. Provider calculates the credit and prepares the filing. Client signs filing. Provider files credit. Describe the common industries of category of businesses that commonly receive this service: Applies to all real estate held for profit. List the authorities governing the service so businesses may do additional research, if applicable: Internal Revenue Code §167; IRS Publication 946; IRS Cost Segregation Audit Techniques Guide; Revenue Procedure (Rev. Proc.) 62-21, 1962-2 C.B. 418. Example: Tax credits can be found in the U.S. Code Title 26, Sections 21 - 52 as well as Treasury Regulation, Title 26, Sections 1.21 - 1.52. Other Service Description Comments Eligibility requirements comments: Service recommendation comments Describe Provider considerations or limitations in providing this service. For example: Legal services can only be delivered under states' laws where the provider is licensed to practice. Cost Segregations require site visits, therefore some providers only service specific geographic areas. Any feedback not solicited above can be put here Or upload comments here Drop a file here or click to upload Choose File Maximum file size: 268.44MB Contact Email * For if we have questions about your submission. Submit If you are human, leave this field blank.
