Cost segregation and R&D tax credits

Some tax savings come from claiming what the rules already allow.

Two common examples are cost segregation, which relates to how a building's costs are classified for depreciation, and research and development credits, which relate to qualifying work on new or improved products and processes. A partner firm can assess whether either applies to your business.

Fairview Audit connects you with a partner firm. Fairview does not prepare tax returns or give tax advice.

What the review looks at

Cost segregation

When a business buys, builds or renovates a property, the cost is generally recovered through depreciation over time. A cost segregation study sorts the cost into property classes and components. Different classes can carry different recovery periods. [VERIFY: current depreciation periods and any bonus depreciation rules that apply]

A study usually looks at:

Purchase or construction cost and the date the property was placed in service.
Building systems, fixtures and site improvements.
Renovations and tenant improvements.
How past improvement costs were classified in your records.

R&D tax credits

A credit may be available where a business carries out qualifying research activity. The tests look at whether the work aims to develop or improve a product, process or software, relies on science, engineering or computer science, and follows a process of experimentation. The business must show that it meets them. [VERIFY: current eligibility tests, documentation expectations and any limits on the credit]

A review usually looks at:

Projects that aimed to develop or improve a product, process or software.
Staff time and wages spent on that work.
Supplies and contract research costs tied to it.
Records that show the work and its purpose.

A sound study ties its allocations back to actual costs and explains its method. Both areas call for careful documentation. Tax authorities may question any claim, so your own tax adviser should review the results.

What you provide

Your partner firm will tell you exactly what it needs. Expect to gather:

Closing statements, construction contracts and invoices for property.
Fixed asset registers and depreciation schedules.
Prior tax returns for the years in question.
Project lists, engineering or design records and test results.
Payroll records showing who worked on which projects.
Contracts with outside developers or labs.
Contact details for your finance lead and your tax adviser.

A project log kept as work happens is far more useful than one rebuilt later.

What happens after you submit a request

You choose a request path and submit the form.
The request goes to a matched partner firm, or to Fairview for manual matching.
A partner firm contacts you to discuss whether your facts fit and its terms.
You share your records.
The partner firm reports its findings.
You decide how to proceed, with your tax adviser.

You stay involved. The engagement and any fees are between you and the partner firm. [CONFIRM: a partner firm supplies and approves whether it covers cost segregation, R&D credits or both]

Who this suits

This category may suit a business that:

Owns or has built a commercial property.
Has renovated or fitted out space.
Develops products, software or manufacturing methods.
Has not looked at these areas with its tax adviser.

It is not for every business, and a firm may tell you that your facts do not qualify. See Property tax and Sales and use tax for other tax-side reviews.

The partner firm that fits may depend on your size.

How Fairview matches you

There are three request paths: larger business, smaller business, and not sure or another need. Each has a form: larger business, smaller business or other needs. Fairview sends the request to a matched partner firm, or matches it by hand on the other path. After that, you work with the firm directly. See how it works.

Who does the work

An independent partner firm that specializes in cost segregation and R&D tax credits handles this work. Fairview Audit makes the match. We do not perform the review ourselves.

Request a professional

Frequently asked questions

Can I claim for property I bought years ago?

Possibly. Changing how past property was depreciated can count as a change in accounting method under tax rules, which may need the tax authority's consent. Ask the partner firm and your tax adviser.

Do small businesses qualify for R&D credits?

Eligibility depends on the work done, not on size alone. A partner firm can assess your facts.

Will this raise audit risk?

Any claim can be reviewed. Good records matter more than anything else.

Who sets the fee?

The partner firm sets it under its own terms. Fairview does not.

Find out what you are overpaying.

Tell us what you need reviewed. We match you by hand with an independent partner firm. You keep your existing vendors.