The Cost Segregation Process

Every firm has a unique methodology for their cost segregation study; however, the fundamental stages are often identical. This is how we conduct ours at Source Advisors:

1. Pre-qualification (WEEK 1)

Every Source Advisors study begins with our detailed pre-qualification process where the scope of work is defined and an estimate of benefits is generated. A flat fee quote is also presented with the estimate of benefits.

2. Request and Gather Data (WEEK 2-4)

Once the proposal is signed, our team will gather and analyze information provided by you, such as: Construction drawings, invoices, change orders, depreciation schedules, etc.

3. Perform Study (WEEK 3-5)

From the invoices, we will identify any property that might be specifically reclassified. In the likely event that the invoice detail is insufficient for the entire study, we will augment the invoices with detailed estimates derived from the construction drawings and site visit of the property. The results will be presented in a report that includes our methodology, relevant case law, definitions, property description, photos, and detailed schedules of our calculations.

4. Review Report (WEEK 5-6)

Each study is reviewed a minimum of three times to ensure accuracy and quality. It typically goes through a peer review, senior management review & final review.

5. Finalize The Report (WEEK 6)

A draft report is first issued and discussions are held with the taxpayer and their CPA to verify Source Advisors assumptions and findings. Once all questions have been addressed and adjustments made to the report, the final report is issued.

6. Audit Support

In the event that a study is reviewed in an IRS examination, Source Advisors’ highly experienced management team will provide audit support through the Appeals stage.

The Source Advisors Approach

At Source Advisors relationships matter. Trust, integrity, and hard work are the core values that have driven our success and created partnerships with many of the nation’s most prominent accounting firms, associations, and Fortune 1000 companies.

Our approach to cost segregation follows these values. At Source Advisors, we don’t train our team on your dime. We only hire heavily experienced cost segregation specialists. We believe experience is critical to maximizing the benefits of cost segregation, and the majority of our team has spent between 10 and 20+ years managing cost segregation projects. Even our least experienced member has conducted more studies than many who manage projects at large firms.

We have a specialized in-house dedicated cost segregation team. Our team is composed of architects, professional engineers, CPAs, MBAs and LEED cost segregation specialists dedicated solely to cost segregation. Our management team is involved in every project we’re engaged to perform and often conduct the site visits themselves. And, with rare exceptions, we always conduct a site visit. The IRS expects it, and we believe it is the best way to accurately assess a property.

Another thing that separates us from the competition is that we have a national presence. Our project managers are located in all major markets across the United States. We also follow the IRS cost segregation guidelines. Our studies are designed to meet the expectations of the IRS as described in its Cost Segregation Audit Techniques Guide. And finally, audit defense is included in all cost segregation studies that we perform.

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