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Cost segregation services provide owners of real property the benefit of accelerated depreciation. We identify qualifying personal property, including carpeting, window treatments, electrical, plumbing, and HVAC equipment which may be depreciated over a shorter life than the building. The purpose of cost segregation analysis is to maximize cash flow by deferring federal income tax payable to future years. Our engineering procedures segregate the costs incurred for newly constructed or purchased facilities according to the Modified Accelerated Cost Recovery System ("MACRS") for federal income tax purposes. This process involves detailed engineering analysis of architectural drawings, construction costs, and detailed knowledge of over 3,000 court cases and revenue rulings. The benefits of a cost segregation project vary according to the type of facility and construction, construction quality, and project cost. However, the net present value benefit can be reasonably estimated based on initial project budget data and our prior experience with over 1,000 properties. The following are guideline net present value ("NPV") savings for a hypothetical $10 million project:
Our engineering analysis follows engineering and cost-estimating procedures. It is structured to provide a clear and detailed audit trail. From construction drawings and on-site measurements, Adams Capital, Inc. estimates quantity and costs for each building component and the associated land improvements. The property items are segregated into categories according to MACRS classifications and the segregated costs are allocated to the total costs of construction or purchase price. Available construction drawings are coded to assist in the identification of components described in the report to provide substantiation and documentation for the recommended classifications. The professionals at Adams Capital, Inc. are experts in performing cost segregation projects to assist in cash flow maximization. Return to Products & Services Page |
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