A cost segregation study needs the CPA affirmation for the client to feel good about cost segregation being applied.
I can't tell you how many times I have shared the benefits of cost segregation with a client who embraces the idea of getting his money today and then talks with his CPA and changes his mind! I'm talking about a client who NEEDS the benefit of cost segregation: accelerated depreciation. The client is keeping his building for life...or at least another 20 years or more. There is no concern over depreciation recapture. There are no NOLs to kingdom come. The property was not involved in a 1031 Exchange. Cost segregation wasn't already performed.
The client understands it's his money and he wants it, yet, his CPA says "something" that causes the client to change his mind. Cost segregation, when it is engineering based and performed, is the key to unlocking a huge financial windfall for the commercial property owner. So again, why will an otherwise intelligent commercial property owner change his mind if his CPA doesn't agree?
I've been told many different reasons why, but none of them make sense. This is especially true when a cost segregation study will easily yield hundreds or thousands of percent ROIs to the owner. I have concluded that cost segregation would immediately see a several thousand percent increase in application with the simple, but all-important, affirmation from the CPA that is the thing to do.
Please, weigh in with your 2 cents, regardless of the side you fall on. I'd love to hear from CPAs with your take on this. Why do you, as a CPA tasked with placing your client in the best financial position possible, advise against cost segregation? Again, I am not referring to the obvious reasons already stated above, but rather the esoteric reasons given. Those reasons that we cost segregation advocates want to know so we can sleep at night!
My CPA tells me there is no legitimate reason not to use cost segregation if all conditions point to it. Most of the time they do. He does say, however, if the CPA agrees to the benefit that many more commercial property owners would take advantage of cost segregation.
Cost segregation delivers results every time it's applied!