This webinar delivers a nuts-and-bolts understanding of some of the most important cost segregation fundamentals:  relevant legal history, engineering steps, and the IRS’s treatment of the technique.  Your instructors will provide critical in-depth information on the IRS’s Audit Techniques Guide (ATG) and address the different methodologies recognized by the IRS as well as reviewing several qualifying tests used to determine 1245 property.  Of particular interest is coverage of the driving factors surrounding the IRS’s development of the ATG and the key elements agents look for during an audit.  You will also discover how a cost segregation study is performed, the correct deliverable format and the proposal process.

Objectives

·         A review of the relevant legal history and taxpayers’ motivations for allocating costs to personal property

·         Several qualifying tests used to determine 1245 property

·         The key areas of the IRS’s Audit Techniques Guide and the key elements agents look for in an audit

·         Different cost segregation methodologies and the advantages of each

·         The engineering steps involved in a cost segregation study, including the deliverable format and the proposal process

·         Bonus!  Update on the most recent legislative and engineering issues related to cost segregation

Course Agenda

I. QUALIFYING PROPERTY: REAL VS. PERSONAL
          A. Critical Court Decisions Governing the Classification of Property
                    1. Whiteco
                    2. Morrison Incorporated
                    3. Hospital Corp of America
                    4. Boddie-Noel
           B. Special Tests
                    1. Permanency  
                    2. Appearance / Function  
                    3. Sole Justification 
II. IRS AUDIT TECHNIQUES GUIDE OVERVIEW
           A. Audio Clip
           B. IRS Industry Specific Guidance - "13 Principal Elements of a Quality CSS"
           C. IRS Review and Examination of a Study - Audit Steps
           D. Cost Segregation Methodologies
III. COST SEGREGATION REPORT AND PROPOSAL PROCESS / THE ENGINEERING PROCESS
          A. Typical Project Procedure 
                   1. Estimate of benefits
                   2. Define and agree on terms
                   3. Analyze data
                   4. Site visit
                   5. Review data
                   6. Create report
                   7. Engineer's certification
                   8. Narrative
                   9. Executive Summary         
           B. Proposal Process
                   1. Information Needed for a Proposal
                   2. Cost : Benefit Ratios
                   3. Engagement Letter
IV. RECENT CHANGES