Frequently Asked Questions
Cost segregation can feel like an obscure process and difficult to find more information on. These are a few of the most commonly asked questions. If you have a question that isn't addressed here, please reach out to us so we can assist you.
How long does a cost segregation study take?
From the initial consultation, to the collection of required information, to our detailed analysis, classification of your property into depreciable classes, and finalization of the report, roughly 2 to 4 weeks.
What types of rental properties qualify for a Cost Segregation Study?
-
Single Family Homes
-
Condos
-
Townhomes
-
Multifamily, from two units to entire communities
-
Airbnb & Vrbo properties
-
Office buildings
-
Strip Malls
-
All other types of Commercial and Industrial type properties
Do you provide Audit Protection?
Yes, because of our confidence in the quality and IRS compliance of our reports, in the rare occasion that your return is audited for the Study we provide, our Staff will represent you in that audit. The only condition is that the CPA or individual doing your tax returns uses the depreciation amounts listed within our report for your property(s).
Should I have any concerns about utilizing a Cost Segregation Study?
As mentioned in our Why Choose Us portion of the website, the IRS recognizes the utilization of various methodologies for Cost Segregation Studies. While our firm employs the most demanding and rigorous methods, other companies do not. As an example, there are a number of firms that use the “Rule of Thumb” approach, that effectively takes the entire cost basis of your property and divides it into random amounts to do their “study”. This approach is highly audited by the IRS, as it doesn’t employ actual cost data, resulting in dollar amounts that can’t be substantiated.
What is required of me as a property owner to have a Cost Segregation Study done?
-
During your property consultation and engagement, the documents needed will be determined based on the type of property, how long you have owned it, and the age of the property.
-
If it's a new property (one that you have had constructed), construction cost data from the build is extremely helpful and well-received by the IRS.
-
Closing statement from when the building was purchased.
-
Appraisal (if you have one).
-
Floor plans or blueprints if available.
-
Records of any improvements or repairs to the property made after your purchase.
-
Pictures of the interior and exterior of the building and property.
When is the best time to have a Cost Segregation Study done?
The first year of ownership is best, but at Cost Seg Property LLC we can adjust your current cost basis by any straight-line depreciation you have already realized on the property. We will also include any improvements made to the property since you first acquired it.
How can I get started with Cost Seg Property LLC to have a study done?
Just click on the link in this, or any other section of the website, fill out the contact form, and we will reach out to you within one business day to discuss your investment and schedule a complete consultation.
