Services

Salas O’Brien’s NPV is a no cost fee proposal and project evaluation. The NPV shows the potential cost segregation study return on investment over the life of the property. The NPV is intended to estimate the potential tax savings benefits of identified Section 1245 property (tangible or personal property) in a property based on limited project information. We provide detailed segregation projections, out to 39-years, for each asset class eligible for accelerated depreciation. This typically includes allocations of building assets into 5-, 7-, 15-, 27- and 39-year categories. In summary the NPV compares the typical straight-line depreciation (27- and 39-year) method to a cost segregation study and demonstrates through figures, tables, charts and graphs the potential increase in cash flow.

Salas O’Brien provides a firm fixed price proposal for each project inclusive of all expenses including an on-site property assessment. The pre-engagement fee is not contingent on the study outcome.

Per the IRS Cost Segregation Audit Technique Guide “A quality CSS includes a site visit…”. Our comprehensive field assessment is included in the firm fixed fee and is required for all cost segregation studies. Our detailed engineering approach is consistent across new construction and acquired projects even if no cost data or blueprint drawings are available. On-site assessments ensure a comprehensive and detailed report by providing the cost segregation engineer an opportunity to validate, quantify, and photograph building components. If construction drawings are not available the site assessment is critical for conducting material and component take-offs/counts, validating component uses, determining material quality and the overall understanding of the design and purpose of the construction project. No cost segregation study should be performed without an on-site assessment.

Salas O’Brien provides the whole report, not just the raw data. Our report consists of three major components, these include the construction cost summary and segregation schedules, a narrative report and a photo file. Our cost schedules contain detailed project cost summaries, an itemized detailed list of qualifying building components with quantities, raw costs, applied factors, our cost sources, assigned asset classes and IRS logic codes for reference. The narrative report contains an executive summary and conclusions, project purpose and scope, detailed site and project descriptions, cost segregation study theory and definitions, our general assumptions and procedures, a comprehensive description of all report components, terms and definitions and our signed and sealed professional certification. The report is complete and requires no further revisions upon receipt. If we are supporting a CPA firm, we can include their branding and logos, delivering a single report as a collaborative effort.

Salas O’Brien’s procedure includes archiving all project documents including our mark-ups, notes, photographs and work papers for seven years. Cost Segregation Report and tax returns may be selected for review by the taxing authorities. Any proposed adjustments by the examining agent are subject to certain rights of appeal. Should any future meetings with the IRS or on-site testimony be required, we will provide our services based on the hourly rate for the individuals involved, plus expenses, at that time. Initial inquiries from front-line auditors to clarify rationale or positions (that can be addressed informally by telephone or e-mail) will be supported as part of our report at no extra cost.