COST SEGREGATION STUDIES

AGI prepares fully documented, detailed cost segregation studies.  While there are firms which rely on letters to contractors, modeling approaches, and percentage allocations, AGI follows a detailed approach of segregating costs as proscribed by the Internal Revenue Service and the Tax Courts.  Our procedure provides the taxpayer with the maximum supportable tax benefits with the necessary detail to substantiate the claims based upon sound engineering, taxation, and valuation logic.

Our methodology follows professional engineering and cost-estimating procedures.   Assets are identified based on consideration of the use of such assets within the project.  Quantity engineering take-offs of labor and material pertaining to individual assets are developed from the construction drawings, specifications, and from other contract information.  Invoices and change orders, which provide unit prices pertaining exclusively to a single asset, are matched to the specific quantity engineering takeoff of the asset.  Invoices and change orders providing unit prices pertaining to labor and materials for multiple assets are allocated to the quantity engineering take-offs for each of those assets.  Labor and material prices for which no specific price can be identified from available contract documents are estimated using nationally recognized cost-estimating manuals.  Quantity engineering take-offs are adjusted for project differences in order to balance to identified subcontract costs.

The indirect project costs (such as architectural fees, engineering fees, general conditions) obtained from contract records are then allocated to the direct project costs, proportionate to the direct project cost.  In certain cases, specific indirect costs related to an identifiable subcontractor are allocated to that subcontractor's cost (i.e., permits required to do electrical work).  The detail is then synthesized into a report substantiating the basis for each asset initially identified.