Why CCC?
What are the Key Benefits of Cost Segregation and do I qualify?
What types of properties are good candidates?
What type of Cost Segregation Study achieves the greatest tax benefits?
What is CCC's Unique Point of Difference in Cost Segregation?
Does CCC conduct a Site Inspection and an Engineering Analysis on every Cost Segregation Study?
Are CCC's Cost Segregation Studies IRS compliant and do you stand by them if audited?
Why hasn't my CPA told me about the engineering component of Cost Segregation?
Can CCC work in tandem with my CPA to perform an IRS-compliant Detailed Engineering Approach Cost Segregation Study?
Does CCC perform a Complimentary Initial Review?
How can I get started?
Cost Segregation is a proven tax planning strategy that allows commercial property owners to accelerate substantial depreciation deductions and defer tax payments. A taxpayer can use Cost Segregation when constructing a building or when buying an existing one. It can even be used if a structure was constructed or acquired several years earlier.
For maximum tax benefits, the IRS requires a specialized engineering firm to perform a Cost Segregation Study utilizing the Detailed Engineering Approach (See IRS Audit Techniques Guide). Until the last few years, only Fortune 500 caliber companies could afford the benefits of engineering-based Cost Segregation through the costly services of their Big 4 advisors. Now Commercial Cost Control (CCC) makes these same services available to you with our in-house engineering experts that hail from the Big 4... At non-Big 4 prices! Please read below for answers to some commonly asked questions and to learn about the CCC difference:
Why CCC?
ï Commercial Cost Control has generated many millions in financial benefits for our client property owners since 1996, and our engineers are actually in-house, while many other supposed providers are simply marketing companies acting as a middle man.
ï We are the nationís only practice with an exclusive focus on Cost Segregation (Detailed Engineering Approach) and specialized Commercial Real Estate Audits (see Construction Cost Audits & Lease Audits).
ï As a boutique specialty firm, CCCís proprietary Cost Segregation process makes available to all businesses the tax benefits previously only enjoyed by the leading Fortune 500 companies.
ï The IRS has very rigid qualification requirements for anyone performing Cost Segregation Studies. The IRS Audit Techniques Guide for Cost Segregation states, "an underlying assumption is that the study is performed by 'qualified' individuals or firms, such as those employing 'Öpersonnel competent in design, construction, auditing, and estimating procedures relating to building construction' (PLR 7941002)". CCC is one of only a select few national firms that have degreed Construction Engineers with hands-on field experience and substantial Big 4 Cost Segregation experience. We are the only firm that has all this and Construction Audit experts.
ï Our combined team of Construction Engineering, Auditing, and Estimating experts comprises a unique expertise offering an unsurpassed outsourcing solution that meets and exceeds IRS requirements (see IRSís 13 elements of a quality Cost Segregation Study).
ï Because of this, business owners stand to earn substantially greater benefits from our Cost Segregation Studies (Detailed Engineering Approach), Commercial Real Estate Audits (Construction & Lease) and Financial Recovery Services.
What are the Key Benefits of Cost Segregation and do I qualify?
The key benefits of cost segregation can be summarized as follows:
ï Substantial Reduction in tax liabilities ñ often hundreds of thousands of dollars
ï Immediate increased cash flow through accelerated depreciation
ï Enhance your real propertyís financial returns
ï Corrects misclassified assets and provides opportunity to claim missed "catch up depreciation" from prior years in the current year
ï Renovations, remodeling and replacement will be less costly due to detailed breakdown of building components
ï Real estate property taxes may be reduced
ï Demolition and rehabilitation allows property owners to write off certain assets as opposed to capitalizing those assets
ï Provides an independent, objective, third party report that will withstand IRS scrutiny.
You qualify if you can answer yes to each of the following questions. Do you:
ï Own commercial property(s) with a valuation of $500,000 or higher?
ï Pay federal income taxes?
ï Operate a For-Profit Entity?
ï Plan on holding on to the property for at least one (1) more year?
What types of properties are good candidates?
ï New buildings presently under construction (see also our Construction Audit Services)
ï New buildings in the pre-construction phase (see also our Construction Consulting Services)
ï Existing buildings undergoing renovation, remodeling, restoration or expansion
ï Purchases of existing properties
ï Office/facility leasehold improvements and "fit outs" (see also our Lease Audit Services)
ï Post-1986 real estate construction, building acquisitions or improvements where no cost segregation study was performed (even though the statute of limitations previously closed on the property construction/acquisition year)
What type of Cost Segregation Study achieves the greatest tax benefits?
For maximum tax benefits, the IRS requires a specialized engineering firm to perform a Cost Segregation Study utilizing the Detailed Engineering Approach (See IRS Audit Techniques Guide). Most CPAís use the straight line method (39 years) and do not have the engineering resources to provide owners with the lucrative tax benefits available from Cost Segregation Studies using the Detailed Engineering Approach. We work in tandem with your CPAís to ensure our studies will provide the solution you expect.
What is CCCís Unique Point of Difference in Cost Segregation?
CCCís Cost Segregation experts include degreed Engineers with significant field and Big 4 Cost Segregation experience. Further, our Commercial Real Estate Audit (Construction & Lease) and Tax professionals will collectively maximize your tax benefits through our proprietary methods for the IRS-preferred Detailed Engineering Approach Cost Segregation Studies. What makes us even more unique is that in addition to Cost Segregation, we offer property owners solutions for specialized Commercial Real Estate Audits (Construction & Lease) and Financial Recovery, thereby creating the potential for even greater financial benefits.
Does CCC conduct a Site Inspection and an Engineering Analysis on every Cost Segregation Study?
Yes. Our Detailed Engineering Approach consists of the following:
ï On-site physical inspection of the property
ï Examination of architectural/engineering drawings and specifications for potential asset reclassification
ï Analysis of cost data, including contractorís application for payments, change orders, owner-incurred costs and indirect disbursements
ï Preparation of an itemized list of property units qualifying for shorter-life classification
ï Appropriating direct labor, material components and indirect costs based on blueprints, engineering drawings and specifications
ï Reconciling total costs per the engineering analysis to capitalized project costs
Our proprietary process ensures we are maximizing your benefits within IRS guidelines.
Are CCCís Cost Segregation Studies IRS compliant and do you stand by them if audited?
Yes, CCCís Detailed Engineering Approach Cost Segregation Studies are in full compliance with the ìCost Segregation Audit Techniques Guideî issued by the IRS. Further, our process meets and exceeds the IRSís 13 elements of a quality Cost Segregation Study. Complete IRS support is provided with every Cost Segregation study we perform.
Why hasnít my CPA told me about the engineering component of Cost Segregation?
Most CPA firms do not have Engineering resources and, therefore, rely on the straight line accounting method which provides clients with only limited tax benefits in cost segregation. In order to realize the maximum benefits available under tax law, the IRS requires Engineers and others, to perform a Cost Segregation Study using the Detailed Engineering Approach. CCC specializes exclusively in the Detailed Engineering Approach in its Cost Segregation Studies.
Can CCC work in tandem with my CPA to perform an IRS-compliant Detailed Engineering Approach Cost Segregation Study?
Yes, we welcome the opportunity to have a CCC Engineer work with your CPA to perform a Detailed Engineering Approach Cost Segregation Study.
Does CCC perform a Complimentary Initial Review?
Yes, in order for you see the potential tax benefits available, all we need is the following information about your property to perform a Complimentary Initial Review:
1) Is it new construction or an acquisition?
2) What was the total cost of construction or the purchase price? Does that include land?
3) If new construction, what year was it built? If acquisition, what is the purchase date?
4) What is the use of the property? (e.g. hotel, warehouse, retail, light manufacturing, etc.)
5) What is the address of the subject property?
6) Please also provide a brief general description, such as how many floors, setting (city, rural, suburban), parking lot, etc. This information helps increase the accuracy of our estimate.
The best time to perform a Cost Segregation Study is the year in which the building is purchased, constructed, or renovated. This allows an owner to immediately start realizing maximum tax savings and will accurately classify assets before the building starts depreciating. However, if it is already later than that, do not worry; the IRS allows you to "catch-up" any missed depreciation in the current year without you having to file an amended tax return.
How can I get started?
Just provide us with the information listed in 1 through 6 above and we will send you a no obligation conservative estimate of your expected benefits and fees. (Contact Us.)
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