Cost Segregation Study (or Cost Seg Study) on New Construction

We highly recommend to our clients and prospective clients that they seriously research and consider the potential benefits of having a Cost Segregation Study (or Cost Seg Study) performed if they have constructed, purchased, or renovated a building in the last 10 years.  This service can also be very beneficial and extremely accurate when performed in conjunction with our risk free Construction Audit Services, on any new construction projects.  The IRS, in its Cost Segregation Audit Techniques Guide (ATG), which was written for its auditors, says that a Cost Segregation Study using “the detailed engineering approach from actual cost records, or ‘detailed cost approach,’ uses costs from contemporaneous construction and accounting records.  In general, it is the most methodical and accurate approach, relying on solid documentation and minimal estimation.” 

Accordingly, it stands to reason that if your Cost Segregation Study is performed in compliance with the IRS’ most “accurate approach,” then you are at a significant advantage if your tax return is ever audited.  In fact, using this approach may even reduce your chances of being audited because you are using the method deemed most accurate by the IRS.  Therefore, by combining the synergies of our Construction Audit Services, where we thoroughly review all actual cost records at your general contractor's office, with our Cost Segregation Services, you will have the most accurate report possible.  Furthermore, the savings afforded you by our Construction Audit Services will very likely cover any Cost Segregation Study fees, plus add to your bottom line. 

We understand the important benefits of proper Cost Segregation Study techniques and the significant impact they can have on your bottom line.  This is why we have construction engineers with field experience and former Big 4 experts on our team preparing these Studies.  Please contact us today so we can immediately get started on your Cost Segregation Study and provide you with a free estimate.  Even if you don't decide to use our Cost Segregation experts, please let our Construction Audit experts add value to your Cost Seg process via our risk free Construction Audit Services.  Again, our Construction Audit Services will likely save you enough money to pay entirely for your Cost Seg Study.

As you can see, the synergies between the two services absolutely create a Win-Win for you!  Our Construction Audit experts thoroughly review and audit all of your construction project costs to ensure you got exactly what you bargained for; then, we convey the actual construction cost data to our Cost Segregation experts, thereby giving you the opportunity to have the most accurate Cost Segregation Study possible. 

Why should I have my Detailed Engineering Cost Segregation Study done at the same time as my Construction Audit?

Most importantly, for the reason outlined above, which is quoted from the IRS’ Cost Segregation Audit Techniques Guide, which is a guideline for IRS auditors.  Again, it says that “the detailed engineering approach from actual cost records, or ‘detailed cost approach,’ uses costs from contemporaneous construction and accounting records.  In general, it is the most methodical and accurate approach, relying on solid documentation and minimal estimation.”  When dealing with tax related issues, it is not a bad idea to follow the IRS’ lead.

During our Construction Audit at your general contractor’s office, we thoroughly review all construction costs associated with your project.  Then, we compile this information especially for our Cost Segregation team in order to increase the accuracy of its Cost Segregation report. 

Furthermore, since our Construction Audit is performed at your general contractor’s office, we have unparalleled access to all the financial records and plans relating to your project.  It can be burdensome for your general contractor to have to produce cost data and drawings for your Cost Segregation Study team, since your GC receives no benefit from this.  You basically have to rely on the goodwill of your GC to supply this information. 

On the other hand, your GC may actually be happy that you are performing a Construction Audit, since it may result in an expedited final payment due to the fact that you will have absolute knowledge that you were billed correctly.  In fact, many construction contracts that your GC uses on a daily basis contain construction audit rights, so your GC is fully aware of this process; it does not require any goodwill on your GC’s behalf. 

Additionally, by performing your Cost Segregation Study simultaneously with your Construction Audit, your general contractor is only producing records one time, which saves time and is greatly appreciated.  Therefore, having your Cost Segregation Study completed with your Construction Audit is advantageous to both you and your general contractor, and it results in the most accurate Cost Segregation Study available.  Contact us today to learn how we can help you in this highly recommended process and provide you with a free estimate of your Cost Seg Study.

If you already have your Cost Segregation Study provider chosen, then we are glad you are taking advantage of this incredible IRS allowed tool to reduce your taxes; however, please consider giving our Construction Audit experts the opportunity to recover enough funds to pay for your Study.

Please click the following link to learn more about What Is Cost Segregation and be sure to see the articles in our Cost Seg Resources section to learn what others are saying about Cost Segregation.