Careful methodology
The study should reflect the property’s actual facts and records rather than rely on unsupported assumptions.
Cost Segregation
Careful asset classification for eligible real property.
Kaice Advisors helps property owners and their advisors evaluate whether a cost segregation study may identify assets that qualify for shorter federal tax depreciation periods.
Overview
What a cost segregation study does.
A cost segregation study reviews the components of a building or improvement project to determine whether certain assets may be classified into shorter federal tax depreciation categories rather than treated entirely as longer-lived real property.
The analysis may involve reviewing construction costs, purchase information, drawings, invoices, site details, and other project records. A supportable study connects asset classifications to the property facts and applicable tax guidance.
Kaice Advisors emphasizes careful methodology, appropriate classification, and documentation that can be reviewed by property owners, CPAs, and other tax advisors.
Actual tax benefits depend on the property, facts, applicable law, placed-in-service timing, and the taxpayer’s circumstances. A study does not guarantee a specific deduction, tax savings amount, or outcome.
Appropriate situations
When a study may be worth discussing.
A preliminary conversation can help determine whether the property and available documentation support a more detailed review.
Recently constructed, acquired, or renovated commercial property
Substantial leasehold improvements or tenant build-outs
Properties with detailed construction or purchase records available
Real estate owners reviewing depreciation positions with their CPA
Businesses planning future acquisition or improvement projects
Advisors seeking specialized study support for a client property
Study process
From preliminary evaluation to documented classifications.
The process is tailored to the property and the available records, with an emphasis on a study that is clear, organized, and supportable.
01
Preliminary evaluation
We discuss the property, transaction or improvement history, available records, and the client’s objectives with the property owner or advisor.
02
Information gathering
We request relevant cost details, drawings, invoices, depreciation schedules, purchase documentation, and other records needed for review.
03
Asset review and classification
We analyze building components and related costs using engineering-based or otherwise supportable methodologies, as applicable to the engagement.
04
Study delivery and advisor coordination
We prepare study materials and schedules for review with the client and their tax advisors so any resulting tax treatment can be addressed within the broader tax return process.
Appropriate classification
Asset categories are evaluated with attention to tax guidance, property details, and documentation quality.
Advisor collaboration
Kaice Advisors coordinates with CPAs and tax preparers so the study can be considered within the client’s full tax context.
Considering a cost segregation study?
Contact Kaice Advisors to discuss the property, available records, and whether a study may be appropriate for the facts involved.