I have just constructed a building and the general contractor’s invoice already breaks down the costs. Can’t my CPA conduct the Study?
A. In September of 2004, the IRS released the first iteration of the Cost Segregation Audit Techniques Guide, in an effort to make clear what they are looking for in a Study. Of the 13 essential elements, the very first item the IRS lists is “Preparation By An Individual With Expertise And Experience.” They further explain the following: “The preparation of cost segregation studies requires knowledge of both the construction process and the tax law involving property classifications for depreciation purposes.” “… a study by a construction engineer is more reliable than one conducted by someone with no engineering or construction background. However, the possession of specific construction knowledge is not the only criterion. Experience in cost estimating and allocation, as well as knowledge of the applicable law, are other important criteria.” “A quality study identifies the preparer and always references his/her credentials, experience, and expertise in the cost segregation area.” The
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- Why are the costs different in the RSMeans Building Cost Data and the Contractors Pricing Guides?
- Why are the costs different in the RSMeans Building Cost Data and the Contractors Pricing Guide?
