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IRS Cost Segregation Position

O’Connor studies fully comply with IRS Cost Segregation Guidelines

The IRS fully supports quality cost segregation studies done in compliance with their published guidelines. They publish, in their IRS Field Audit Techniques Guide, checklists for a quality study and quality cost segregation report.

IRS Cost Segregation Audit

O’Connor cost segregation studies comply with those guidelines.

The 13 Principal Elements of a Quality Study

From IRS Cost Segregation Audit Techniques Guide

O’Connor’s methodology incorporates all of these elements, unless noted.

  1. Preparation by an individual with expertise and experience
  2. Detailed description of the methodology
  3. Quality Cost Segregation Report Use of appropriate documentation
  4. Interviews conducted with appropriate parties
  5. Use of a common nomenclature
  6. Use of a standard numbering system.
    Note: This element is not mandatory and is not a routine part of our approach.
  7. Explanation of the legal analysis
  8. Determination of unit costs and engineering “take-offs”
  9. Organization of assets into lists or groups
  10. Reconciliation of total allocated costs to total actual costs (when actual is available)
  11. Explanation of the treatment of indirect costs
  12. Identification and listing of Section 1245 property
  13. Consideration of related aspects, e.g., IRC 263A, Change in Accounting Method and Sampling Techniques. Note: Sampling Techniques are not always applicable and are not a routine part of our approach.

Principal Elements of a Quality Cost Segregation IRS Report

From IRS Cost Segregation Audit Techniques Guide

O’Connor’s reports include all elements.

  1. Summary Letter/Executive Summary
  2. Narrative report
  3. Schedule of assets
  4. Schedule of direct and indirect costs (when available)
  5. Schedule of property units and costs
  6. Engineering procedures
  7. Statement of assumptions and limiting conditions
  8. Certificate
  9. Exhibits