Fee Options – Is the Site visit Worth the Cost?
You can obtain cost segregation reports with or without a site visit. O’Connor has a series of options for you to provide videos, photos, documents and interviews with on-site key personnel that can replace much of the benefit of the site visit.
While the vast majority of our clients opt for a site visit, the few that decide against the site visit are typically individual investors. Sponsors with individual partners are less likely to do so. Let’s review representative fees with and without a site visit for commercial and single family:
Bonus Depreciation / Cost Segregation Fee Options
|Includes On-Site Inspection||$5,000+ (1)||$750 to 1,500+ (2)|
|No On-Site Inspection||$2,500+ (3)||$300 – $500+|
- Cost segregation reports including a site inspection typically start at $5,000. Complex properties are more expensive and there can be discounts for a group of properties.
- Typically $1,500 for a single property if a site inspection is included; discounts available for groups.
- Most commercial properties can be reasonably done for a fee of $2,500 if no inspection is required. It may not be appropriate for complex properties and discounts are available for groups.
Steering Clear of IRS Problems
O’Connor has completed over 10,000 preliminary analyses where we also completed the cost segregation study. We have deep experience and expertise in generating preliminary analyses.
Remember the IRS wants: 1) credible method, 2) creditable results and 3) documentation of the results.
Advantages and Disadvantages
The additional depreciation gained from a cost segregation study done without a site visit is likely to be slightly less, maybe 5 to 10% less. This is because the items that qualify for short-life depreciation can be a bit arcane and may be missed if a cost segregation expert does not perform a site visit.
Depending on the client’s circumstances, they might not need the last dollar in depreciation and prefer a lower cost.
O’Connor Guarantee – we will defend our study through any inquiries regarding our cost segregation report in the rare case there is an inquiry from the IRS. Our methodology and results are credible and have met the IRS standards in the approximately one dozen requests over 20 years and 10,000 reports. This guarantee applies whether you choose to include the site-visit or not.
For more information, call Roger Hibbs at xxx xxx xxxx or contact him via e-mail at firstname.lastname@example.org