What is a Cost Segregation Study?
A decision by the Tax Court ruled that tangible personal property that has been included in an acquisition or in overall commercial property should be treated as tangible personal property, not real property, for depreciation purposes (see Hospital Corporation of America, 109 T.C. 21 (1997)). We can help to complete an engineering based cost segregation study, which can help save your clients money. An engineering based cost segregation study has been identified as preferred by the IRS. Our studies segregate the tangible personal property from the real property. J. R. Johnson Engineering, Inc. can provide those vital cost segregation study services to meet your requirements.
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Why J. R. Johnson Engineering?
J. R. Johnson Engineering has over 20 years of history providing engineering services to Northeast Ohio companies. Our skilled staff is dedicated to working together with your team to help you achieve your goals.
- Specializes in construction cost estimating methodologies.
- Thoroughly understands the acceptable accounting requirements for segregating tangible personal property from real property.
- Has a thorough understanding of engineering, construction and tax issues as it applies to cost segregation.
- Has the knowledge and experience to conduct the site walk-through to provide the basis for the cost segregation study.
- Can analyze the AIA billing information or site drawings.
- Will analyze your new construction or pre-existing facility acquisition.
We have conducted cost segregation studies for various commercial and industrial companies, which include:
- Manufacturing Facilities
- Warehouse Facilities
- Automotive Dealerships
- Office Buildings
- Dental Offices
- Movie Theaters
What can I expect from J. R. Johnson Engineering?
- The methodology used to compile the costs for a cost segregation study includes conducting a walk-down of the entire facility. During the site visitation the quantity, type, size and estimated remaining useful life of all equipment discovered for this study is documented. Sketches are made of the building layout, equipment systems, and configurations. Additionally, photographs are taken to further identify and document the equipment. Finally, on-site representatives from our engineering staff interview company personnel who can provide additional information regarding the site and equipment.
- Following the site visit, our estimators prepare a cost estimate. The estimators perform a building and equipment inventory using the information, photographs and engineering notes gathered during the site visit. The estimators then determine the present costs to purchase and install the identified equipment. This is accomplished
using standard cost estimating techniques.