Depending on the type of project, we review site surveys, blueprints, construction drawings and specifications.
Additionally, we review general contractor, architect/engineer and private vendor invoices and change orders
when applicable. We also perform a comprehensive review of all relevant financial records. We tour the facility and
take photos to document critical issues; we also interview key personnel. We then identify and reclassify all
eligible assets to shorter recovery periods with the goal of accelerating your tax depreciation deductions.
There is no charge for the initial assessment. If our assessment indicates that a Cost Segregation opportunity exists, we will
provide you with a written fee estimate. Our fees depend on the size and scope of the project. Your tax savings generally greatly exceed our
fees, and depending on the situation, you may recover the cost when you make your next quarterly payment or file your tax return.
We don't commit to performing a Cost Segregation study without providing
you a free initial assessment and cost proposal. From that, you and your
accountant can evaluate the cost versus savings factors up front.
Although your accounting firm may be aware of Cost Segregation as a concept, it's unlikely that they have the in-house
expertise required to conduct a Cost Segregation study for you. Accountants may be able to capture some of the tax
deductions but most don't have the engineers on staff to inspect the property, examine the architectural and engineering
documents and analyze the cost data.
Engineering-based cost segregation studies are accepted by the
for reclassifying assets in order to accelerate
tax deductions for depreciation. Our experienced engineers have conducted hundreds of successful cost segregation
studies. They apply the most current interpretations of IRS regulations, ensuring that our studies withstand
Madison SPECS can find eligible assets in:
- facilities built or bought since 1986
- newly constructed, renovated or expanded facilities
- facilities with significant construction in progress
- inherited properties
- For existing properties, you can recapture "missed" depreciation for previously understated
deductions with a simple change in accounting method, which Madison SPECS can help you file.
Most companies in the Cost Segregation business conduct studies that emphasize either the tax approach or the
engineering approach. What differentiates Madison SPECS from these companies is that we truly integrate the two approaches:
- Engineering expertise
- Our in-house engineers assess the eligible assets and determine their cost using widely
accepted sources of construction cost information, such RS Means.
- Tax expertise
- We follow the most recent depreciation guidance provided by the IRS.
In general, buildings can be depreciated over either a 27.5-year or a 39-year period, but certain categories
of fixed assets within a building can be depreciated more quickly through cost segregation. Through this
accelerated depreciation, an income tax benefit is created thereby generating increased cash flow.