How to Prepare for a Cost Segregation Study

[Julio Gonzalez]

Are you looking into getting a cost segregation study on your property and wondering what benefits the study may provide and how much it will cost? Ensuring that you provide all of the applicable information to the cost segregation study company helps them provide the most accurate cost benefit analysis. The type of information needed depends on if the building is being constructed in the future or if the building already exists. Here’s a breakdown of some of the information you may need to provide for a cost segregation study.

For existing buildings:

• List of equipment on the property
• Property settlement state
• Any appraisals or purchase/lease agreements
• Property maps or blueprints
• Schedules, change orders or documents for future renovation plans
• Supporting documents for calculating real property book value
• Previous purchase price allocations that separated assets into their appropriate allocation and value
• Past site inspections and photographs
• Documentation that proves or records deterioration of assets

For new construction:

• Contracts or contract payments
• Land and property size
• Blueprints of project
• List of equipment involved or purchased
• List of projected costs including costs for land development
• Applicable site inspections
• Construction schedules and payment requests
• Photographs of completed assets or work in progress

Cost segregation specialists typically have an organized plan for the collection and analysis of the information provided. It’s critical to provide all of the documentation that is requested in order to allow the cost segregation professional to maximize your benefits.