Segregated Cost Study
Why get one of these? After 2014 there is an added reason. The capitalization regulations are pretty limiting on what is called a repair – you will most likely be capitalizing some things you, at one time, called a repair. The good news is that you can deduct the undepreciated of a component when it is replaced. The data needed is the remaining basis. With a segregated cost study you will have the data. So, for example, when the roof that must be depreciated over 39 years is replaced after 15 years, you can deduct the remaining basis in the roof – IF you know the remaining basis. i.e. You had a supportable basis for the roof and it was depreciated as a separate item. IRS will not accept any cost study that is not engineered. We do engineered segregated cost studies.