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Services : Depreciation & Specialized Valuation
iParametrics is a leading provider of engineering-based depreciation
solutions, including Cost Segregation services. By providing superior
technical expertise based on sound engineering, we leverage proven
strategies to accelerate depreciation and maximize cash flow. Our
technical expertise is second to none, incorporating a blend of
financial and legal analysis, engineering and traditional cost
estimating methodologies.
What is Cost Segregation?
Cost Segregation is the process of identifying personal property assets
that often get buried or lumped together within the Real Property asset
category of real estate. By undergoing a Cost Segregation study, these
personal property assets are reclassified to the shortest possible
depreciable life to enable real estate owners to maximize depreciation,
thereby reducing income tax obligations.
Most commonly, these personal property assets include a building's
non-structural elements, exterior improvements and indirect construction
costs. Certain assets related to the project may also qualify for
accelerated depreciation in which larger tax deductions are taken over
a shorter period of time.
Leveraging accelerated depreciation opportunities involves a comprehensive
analysis of capital expenditures to determine appropriate asset
classifications. A Cost Segregation study can identify building costs
that would typically be depreciated over a 39-year period and reclassify
them to permit a shorter, accelerated method of depreciation. Costs for
non-structural elements, such as wall covering, carpet, and accented
lighting, and exterior site improvements such as sidewalks and landscaping,
can often be depreciated over 5, 7 or 15 years.
iParametrics' team of technical experts and financial analysts draw upon a
comprehensive knowledge of engineering, cost estimating, IRS regulations
and tax law to produce a detailed and accurate rendering of your facility.
Our team provides a detailed analysis and accounting of the data, segregating
individual building elements into the appropriate asset categories, and
reconciling each component to applicable tax and case law. The amount of
savings realized will vary based on expenditures, operations, facility type
and a variety of other factors. However, most owners derive benefits such
as:
- Decreased income tax liabilities, resulting in increased cash flow
- Lower cost of capital in the first few years following a project or purchase
- Ability to more effectively manage capitalized assets
- Alternative engineering-based valuation of real estate assets
- Opportunity to reassess "replacement value" insurance coverage
Experience
Cost Segregation is a derivative core competency of our engineering services
practice. It takes cost estimating, facility design and construction a
step further. Our clients can rest assured that our work product is based
on the same methodology that has been used successfully with government
clients including the United States Navy, Army Corps of Engineers, United
States Air Force, Department of Justice, Department of Defense and the
Department of Veterans Affairs.
Specialized Valuation Services
iParametrics provides cost estimating and valuation services to support the
allocation of purchase price for transactions involving real property and other
assets.
Purchase price allocation services can be performed to support tax compliance,
regulatory compliance under Statement of Financial Accounting Standard 141
(“FAS 141”), or for other purposes. Our team of cost engineers, valuation
professionals, and financial analysts provides the expertise to help our clients
accurately report the impact of their real property transactions to their investors
and other stakeholders.
Our purchase price allocation services conform to the Uniform Standards of
Professional Appraisal Practice (USPAP), and our team includes Certified Public
Accountants and professionals with the Member, Appraisal Institute (MAI) designation
or the Accredited Senior Appraiser (ASA) designation from the American Society of
Appraisers.
References
IRS Cost
Segregation Audit Techniques Guide
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Our team members have performed