Cost segregation is the process of separating the costs of tangible personal property, other tangible property, indirect costs, and land improvements from building and improvement costs. Segregated costs generally allow deductions to be taken over a 5-year, 7-year, and 15-year recovery period instead of a 39-year recovery period on a straight-line basis. The purpose of our study is to maximize the depreciation deductions for federal and state income tax purposes.

There are numerous IRS rulings and cases that support cost segregation studies. Companies and individuals undergoing cost segregation studies realize substantial returns on their investments within the first 5 to 15 years of the assets depreciable life. As a rule of thumb, 15% to 40% of total building cost can be allocated to shorter depreciable lives.

Our specific services include:

• Segregating the various building costs into their proper 5, 7, 15 or 39-year tax lives.
• Providing you with proper documentation to set up the "new" fixed assets into your depreciation system.
• Preparing the Form 3115 Application for Change in Accounting Method where applicable.
• Visiting the site for detail analysis of the property, if necessary, and obtaining photographs to document our conclusions.
• Preparing a detailed report summarizing our findings to be used as support and substantiation to be defended as a stand-alone product. The report will document Internal Revenue Code, Treasury Regulations, court cases and revenue rulings as it applies to the Company's use of the real estate and specific industry in which you operate. The report will identify the total cost of the project with the supporting cost information used in segregating the particular assets we identify. We will provide a detailed summary of the newly revised or created real and personal property by the appropriate tax and alternative minimum tax lives.