Question: Did you have to file 3115 in order to partially dispose of assets retired in the current year, but purchased in a prior year?
Answer: No. Current year partial dispositions do not require a Form 3115.
Question: Are 5 year appliances (maybe $1,000/unit?) the main accelerated depreciation items from 27.5 year depreciation? It seems like that wouldn't be a lot of extra depreciation, or are there typical other categories that add more?
Answer: In a typical cost seg study, there are many other items deducted such as flooring, millwork, special purpose plumbing, etc. This is the reason we ask all these questions on the survey within the Residential Cost Segregator™.
Question: For larger buildings, 10-20 units, up to $1-2 million, etc. can a similar tool be used?
Answer: The Residential Cost Segregator™ is designed specifically for properties too small to hire an experienced CCSP to analyze. Because every property is unique, it may not account for unusual items that exist and generally provides a more conservative allocation than may be available to the taxpayer. The Residential Cost Segregator™ is not adequate for use to conduct a Cost Segregation study on larger, more complex properties.
Question: On a commercial building (purchased "used") if a roof replacement is required, can a portion of the original cost be deducted upon replacement?
Answer: Yes.
Question: Does this make sense for a condo unit?
Answer: The software does not work with townhouses and condos yet. This will be available in the next update to the software in approximately 30 days.
Question: If a client is limited on losses because of passive activity rules, is this helpful?
Answer: I may not be helpful in this situation. It’s important to understand whether extra deductions from a cost segregation study will be utilized to offset tax before moving forward.
Question: For a ~250 unit apartment project, is a cost segregation study more appropriate?
Answer: We would recommend a detailed study conducted by a Certified Cost Segregation Engineer (CCSP).
Question: Can this software be used for commercial buildings as well?
Answer: No, because of the differences in commercial construction, this software was not made for commercial properties. This only works for residential rental property up to 6 units and under $600,000.
Question: Can we get a sample of the survey or questionnaire?
Answer: You can register at solutions.kbkg.com and look at it for free.
Question: If you are purchasing $450 reports (i.e. 4 reports at a time), can you use one this month and the others as needed over the next year?
Answer: Correct. When you purchase a report, you get a credit. The credit is saved to your account and stays in your account until you use it.
Question: Does the price you enter after subtract the land cost?
Answer: The price you enter into the software must be depreciable tax basis, excluding any land value. So you must subtract the non-depreciable land cost prior to entering the price.
Question: Have your reports been under audit and what was the result?
Answer: The software is too new so the Residential Cost Segregator™ reports have not been audited. KBKG is one of the largest and most experienced cost segregation firms in the country and is confident they will withstand audit scrutiny.
Question: How many years can you go back and prepare the report. If the asset was placed in service in 2010 can you do the 3115?
Answer: Yes. You can go back as far as you want, but it generally does not make sense to go back further than 15 years.
Question: How many years since the purchase of a commercial building would it be beneficial to do a cost segregation project?
Answer: We generally say 15 years, but if the basis is high enough, you can go back further.
Question: How do the results of using the Residential Cost Segregator™ (RCS) compare to actual CS done by one of your engineers on the same building?
Answer: Because every property is unique, the software may not account for unusual items that exist and generally provides a more conservative allocation than may be available to the taxpayer compared to a study done by certified cost segregation professionals.
Question: Does the $600K limit on use of RCS, apply to resulting basis of a property acquired in a Section 1031 exchange?
Answer: If the property is a residential rental property of 6 units or less, the Cost Segregator™ can be used on the resulting basis of a 1031 exchange.
Question: What is VCT for flooring type?
Answer: Vinyl Composition Tile
Question: If carpet over hardwood which selection to be used?
Answer: Carpet
Question: If after performing calculation and saving report we find that some of the info was incorrect, is there an additional fee to run again?
Answer: To avoid abuse of our software, we do not allow changes after a report is finalized. If you run into problems like that, you can contact us, or email [email protected].
Question: Since the information from the Cost Segregator™ is exported into excel, is it in a format to import directly into our tax software, i.e. Lacerte?
Answer: Yes. Our excel export was specifically formatted to be easily imported into most tax software.
Question: Is there another webinar re the partial disposition calculator or briefly explain how it works?
Answer: We don't have a webinar for that, but we have a demo; https://www.kbkg.com/partial-disposition-calculator.
Question: With the RCS it is still up to us tax "professionals" to determine the initial building/land allocation before using the RCS calculator.
Answer: The software does not determine the land vs. building allocation.
Question: How much will it cost to use the 481(a) Calculator?
Answer: The 481(a) Calculator is free through October 15, 2016. After that, it will cost $150 per use with the purchase of a Residential Cost Segregator™ Report. For all other users, it costs $249 for 24 hours, or $2000 per year.
Question: Do the credits expire if purchased in quantity for the discount?
Answer: No.
Question: Is Partial Disposition good only for Residential Property
Answer: The partial disposition calculator can be used with any property.
Question: How is the NPV calculated - automatically?
Answer: Yes. Instantaneously
Question: Since we won't be doing all the reports at one time, how do we get the volume discounts?
Answer: You would prepay for 10 or more report credits to receive the discounts. Purchased report credits can be used anytime and never expire.
Question: Can we embed this into our website?
Answer: Yes. We can discuss more in person if you want to do something like this: [email protected].
Question: What are the tier levels for the "credits" and discounts? i.e. is 10 the highest discount level?
Answer: See below. If you are buying more and would like a bigger discount, please email us at [email protected].
| Number of Reports | Price | Discount |
| 1-9 reports | $450 each | -- |
| 10-19 reports | $400 each | 5% |
| 20-49 reports | $380 each | 10% |
| 50+ reports | $360 each | 15% |
Question: I can't find the tier pricing. Do I have to set up an account
Answer: Yes. Once you are in the Residential Cost Segregator™, you can click on “purchase reports”
Question: Do I get three credits or have to have them each log in next time?
Answer: It's best to setup one account for your firm and buy all of the credits for that account.
Question: What about buildings greater than $600,000?
Answer: You will need a full cost segregation study; the software was not designed for residential buildings greater than 600k. In that case we believe a typical cost seg study with an engineer is preferable.
Question: What about office condo's under 600k?
Answer: This only applies to residential properties. It was not designed for commercial property.
Question: Is that a possibility in the future?
Answer: It is not currently in development, but it will definitely be considered.
Question: Have you had your reports audited?
Answer: The software is too new so the Residential Cost Segregator™ reports have not been audited. KBKG is one of the largest and most experienced cost segregation firms in the country and is confident they will withstand audit scrutiny.