I want to do cost segregation. From what I know, it involves identifying fair market values for short life assets. Do I have to pay for like an appraisal? Can't I just tell my CPA my fridge costs X amount and my new carpet it Y amount?
2007-03-14 11:37:53 · 5 answers · asked by Doris H 1 in Business & Finance ➔ Taxes ➔ United States
Some of these people really don't know what they are talking about....
Cost segregation can cost a lot, because normally you have to pay someone to identify the costs behind assets in the property. For example, Fridge cost $1000, delivery $50, installation $50, etc...
You can evaluate it yourself using fair market value (cost of replacement), I would say the fridge is worth atleast $1100.
This process can get quite sticky, and there is room for error. I recommend using software, (Not TurboTax or TaxCut, not very helpful). You can use www.DepreciateEm.com for free and set it up yourself, that's probably the best solution for you.
2007-03-14 12:02:50 · answer #1 · answered by thetaxman07 1 · 0⤊ 2⤋
Cost segregation can cost a lot, because normally you have to pay someone to identify the costs behind assets in the property. For example, Fridge cost $1000, delivery $50, installation $50. You can evaluate it yourself using fair market value. For more see this.
2014-07-14 22:33:22 · answer #2 · answered by Anonymous · 1⤊ 0⤋
You should talk to your CPA first. I dont think you would need cost segregation for those assets. Those assets can already have short lives, like 7 years. It is very expensive for a CPA to do this work.
I heard about this software that allows you to do the work yourself:
https://www.trexglobal.com/tax_depreciate
2007-03-14 11:48:55 · answer #3 · answered by tma 6 · 0⤊ 1⤋
Yes, Doris; if you have the actual costs of the individual components, you can definitely have your CPA list them out separately according to their respective asset lives. The IRS audit technique guide below even references that using actual costs is usually the most accurate way to segregate costs.
The below AICPA link provides a thorough explanation of cost segregation as well as a summary the advantages and disadvantages. Good luck! :-)
2007-03-14 11:45:27 · answer #4 · answered by Anonymous · 0⤊ 1⤋
What are you babbling on about? Assets are depreciated or Section 179'd based on their cost basis. FMV doesn't come into the equation.
2007-03-14 11:46:51 · answer #5 · answered by Bostonian In MO 7 · 1⤊ 0⤋