materials cost segregation

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CS 101: Overview of Cost Segregation

Presented by:Gian P. Pazzia, Civil Engineer

A Commitment to Excellence for Over 60 Years

www.costsegregation.bizKBKG, INC. COST SEGREGATION SPECIALISTS

Overview

What is Cost Segregation?The BenefitsHistory & Legal FrameworkWhen & How Should A Study Be Done?Depreciation RulesThe DeliverableTax IssuesCase StudyHow to measure potential opportunities

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What Is A Cost Segregation Study?

A formal engineering process acceptable to the IRSIdentifies building costs and land improvements - traditionally depreciated over 27.5 or 39 years Re-allocates a significant portion of these Section 1250 “building” costs to asset classes with shorter depreciable lives.


What Is A Cost Segregation Study?

Before

39 Year

31.5 Year

Or

27.5 Year

=

After

39 - Year31.5 - Year27.5 - Year 15 - Year7 - Year 5 - Year3 - Year

orExpensed!

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Tax Lives

R.P. 87-56 (approximately 135 asset classes)

Qualifying construction costs from the property should be depreciated over 3, 5, 7, and 15 years.

This results in:Accelerated depreciation deductionsA reduced tax liabilityAnd an increase in cash flow


Benefit: Accelerated Depreciation Deductions

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Benefit: Accelerated Depreciation Deductions

The depreciation for a property with a Cost Segregation Study allows for significant increase in deductions within the first 5 years.

For every $100,000 of cost shifted from 39-year property to 5-year property, the present value tax benefit is approximately $22,000.*

For $100,000 of cost shifted from 39-year property to 15-year property, the present value tax benefit is approximately $12,000.*

Depreciation Deductions By Year: $5M Office Building

Ded

uctio

ns in

$1,

000s

Without a Cost Segregation StudyWith a Cost Segregation Study*These benefits assume a combined tax rate of 41%

and a Return on Investment factor of 8%. They are even higher if Bonus Depreciation or Section 179 applies.


History of Cost Segregation

Cost Segregation has been around since the 1960’s.

There have been over 200 court cases and IRS rulings supporting the benefits of Cost Segregation.

The initial cases were related to the Investment Tax Credit (ITC) and whether items related to a structure could qualify for the credit.

Whiteco Industries, Inc. (Billboards)

Scott Paper Co. (Electrical Distribution Systems)

Morrison, Inc. (Kitchen Electrical Panel Boards)

Illinois Cereal Mills (Electrical Distribution Systems)

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Whiteco Factors Tax Court’s first attempt at creating a test

1975, the Tax Court based on analysis of judicial precedent, developed six questions designed to ascertain whether a particular asset qualifies as tangible personal property. These questions are referred to as “Whiteco Factors.”1. Can the property be moved and has it been moved?

2. Is the property designed or constructed to remain permanently in place?

3. Are there circumstances that show that the property may or will have to be moved?

4. Is the property readily moveable?

5. How much damage will the property sustain when it is removed?

6. How is the property affixed to land?


Scott Paper Company

1964 Build out

Increased Capacity

Primary & Secondary Electrical Distribution Systems

Traced electrical load directly to equipment

Tangible vs. Real Property

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Hospital Corp of America v. Commissioner

In the landmark Hospital Corporation of America Case 109 TC 21 (1997) the courts further expanded the benefits of Cost Segregation.

The Court ruled that certain costs related to specific ordinary use equipment (that otherwise would be viewed as structural) qualified to be depreciated over the life of the underlying asset.

In 1999 the IRS issued a memorandum in which it acquiesced to the Tax Court Ruling.


HCA Breakdown

Electrical Distribution (1245)Branch Wiring (1245)TV Wiring (1245)Telephone/Communications equipment wiring (1245)Carpeting (1245)Vinyl Wall Covering (1245)Vinyl Floor Covering (1245)Kitchen Water Piping/Steam lines & X-ray plumbing (1245)

Kitchen Hoods/Exhaust Systems (1245)Patient Handrails (1245)Overbed lights (1250)Partitions (1245)Bathroom Accessories (1250)Acoustical Ceilings (1250)Steam Boilers (1250) No logical method for allocation

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Chief Counsel Guidance

IRS Chief Counsel issued guidance to the Service on May 28, 1999. Guidance stated the following:

The determination between tangible and structural property is a facts and circumstance assessment.The use of cost segregation studies must be specifically applied by the taxpayer.Allocations must be based on logical and objective measure.An accurate cost segregation study may not be based on non contemporaneous data, or assumptions that have no supporting records.Cost Segregation Studies will be “scrutinized by the field”


Recent Changes

In March 2002 the IRS issued Rev Proc. 2002-19 allowing automatic depreciation accounting changes created by a Cost Segregation Study for prior years to be expensed in one year, instead of spread over four years, as had previously been accepted. IRC Section 481 Adjustment reported on Form 3115.In January 2004 the IRS issued Rev Proc. 2004-11, which further simplified the process allowing tax payers to prepare a form 3115 even if an accounting method had not been established.An Accounting method is established when a taxpayer follows a particular method of reporting information for two consecutive years.

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Recent Changes

IRS Audit Techniques GuideIssued April of 2004 and Modified January of 2006Developed to assist field agents in reviewing Cost Segregation Studies

How they should be prepared.What to review and look for.When to call in IRS Engineers.

To access the Cost Segregation ATG, go to www.costsegregation.biz


Cost Segregation Audit Techniques Guide

Detailed Cost Approach“It is the most methodical and accurate approach” IRS, CS ATG

“Inspect the facility to determine the nature of the project and its intended use”“Review "as-built" blueprints, specifications, contracts, bid documents, contractor payment requests, and other construction documentation”“Prepare quantity takeoffs”“Reconcile total costs obtained from quantitative take-offs to total actual costs”

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When Should a Study be Done?The optimal time to perform a study is the year the property is placed in service

However, current IRS procedures allow a taxpayer to recover any missed depreciation on properties placed in service as far back as 1987 without having to amend prior years tax returns.

Year built, purchased, or

remodeled

1987 Current Year


Applies to:

NEW CONSTRUCTION

Indirect Costs+

General Contractor Costs

+Direct Costs outside

General Contract

ACQUIRED PROPERTY

Purchase Price

Land Cost

Building and SiteImplementation Cost

MACRS - GDS

39 - Year Property27.5 - Year Property15 - Year Property7 - Year Property5 - Year Property3 - Year Property

orExpensed!

=OR

New ConstructionAcquired Property (as far back as 1987)Remodeled Property (as far back as 1987)Build-outs (as far back as 1987)

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Cost Segregation Process

During a cost segregation study a cost segregation specialist/engineer will:

Tour the siteReview information

Blue Prints, Cost Documents, Appraisals etc.Account for the value of all components

By using estimates or invoicesDetermine which components qualifyAllocate construction indirect costsReconcile estimates to the purchase price


Tax Laws For Qualifying Assets

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39- Year Property: Finally, all other types of buildings are depreciated over 39 years

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DocumentationThe process should also include

A full review of the company’s fixed asset recordsPhoto documentation for assets that are treated with a short life A thorough narrative of the property characteristicsReferences to the exact source of costs for all engineering estimatesAn evaluation of the physical condition of every componentAn evaluation of the “facts and circumstances”surrounding the use & construction of each itemSubstantial authority for the 1245 treatment for all assets


Cost Segregation Methodologies

Detailed Cost Approach (Construction)Detailed Engineering Cost Estimate Approach (Usually Purchase)Residual Estimation ApproachSampling or Modeling Approach“Rule of Thumb” Approach (Not Acceptable)

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Report Outline

Purpose and scope of the engagementStudy Procedures/MethodologiesTax Considerations

Definition of 1245 Property, 1250 Property, Land ImprovementsMACRS Categories ADR Classifications

Asset Class Codes – Specific to the subject propertyDescription of the PropertySubstantial authority for the treatment of assetsPhotographs of the facility & qualifying assetsDetailed Analysis Schedules


Qualifying Projects

Building Type

Apartment BuildingsRetail StoresRestaurantsOffice BuildingsManufacturing FacilitiesResearch &

DevelopmentWineriesGrocery StoresHotelsWarehousing

Average Re-Allocation

20-35%20-40%20-45%10-25%20-60%30-60%20-45%25-45%25-45%10-25%

Other Projects Include:Shopping MallsAirportsSports FacilitiesGolf Courses & RangesAuto DealershipsResortsHealthcare facilitiesMedical CentersIndustrial BuildingsDistribution CentersAuto Service CentersAnd more

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Example 1 Office BuildingCurrent Year Acquisition

Review the following example: a taxpayer purchased a $5 million office building without Furniture, Fixtures, & Equipment.Without a Cost Segregation Study the costs are depreciated over 39 years.In this illustration with a Cost Segregation Study, the specialist finds:

*These benefits assume a combined tax rate of 41% and a Return on Investment factor of 8%. Benefits are even higher if building is eligible for Bonus Depreciation and/or Section 179.

Of $5 Million:

$750,000 depreciated over 5-7 years

$500,000 depreciated over 15 years

$3,700,000 depreciated over 39 years

Increased Depreciation Deductions in the first 5 years: $750,000

Projected Benefits: $235,000

$5 Million Depreciated over

actual life of assets

With a Cost Segregation Study


Example 2 Look-back Study for a Leasehold Build-Out: Retail

In this second example we consider a property that was placed inservice five years ago. Without a Cost Segregation Study this $1 million retail buildout was being depreciated over 39 years. With a Cost Segregation Study the specialist finds:

*These benefits assume a combined tax rate of 41% and a Return on Investment factor of 8%. Benefits are even higher if building is eligible for Section 179.

Of $1 Million

$450,000 depreciated over 5 years

Remaining costs continue to be depreciated over 39 years

Increased Depreciation Deductions in the first year: $386,000

Projected Benefits: $104,000

$1 Million Depreciated over

actual life of assets

With a Cost Segregation Study

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A lot of room for interpretation

Because of this, the IRS prefers a study to be done by a qualified professional familiar with the extensive case law.

Defining Tangible Personal Property

Hundreds of cases that often times conflict


Tangible Property

Real PropertyLandLand improvementsBuildingsBuilding improvements

Personal PropertyBusiness machinery equipmentOffice furniture and fixturesAppliances that are furnished to tenants

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Land ImprovementsAsset Class 00.3

Includes improvements directly to or added to land, whether such improvements are section 1245 property or Section 1250 property, provided such improvements are depreciable. Examples of such assets might include:

RoadsDrainage facilitiesWaterwaysDocksBridgesShrubbery

SidewalksCanalsSewersWharvesFencesLandscaping


“Building” IRS Defined

Any structure or edifice:Enclosing a space within its wallsUsually covered by a

roofThe purpose of which is

to provide shelter for housing, orTo provide working,

office, parking, display or sales space

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Includes such parts of a building:Plumbing and

plumbing fixtures such as sinks, bath tubs, & sprinklers

Electric wiring and lighting

ChimneysStairsElevatorsFire Escapes

Walls and partitionsFloors and ceilingsWindows and doorsCentral air

conditioning or heating system including motors, compressors, pipes, & ducts

Any other components relating to the operation or maintenance of a building

“Structural” Components: IRS Defined


Any tangible property except:Land and improvements theretoBuildings or other inherently

permanent structures (including items which are structural components of such buildings or structures)

Property which is contained in or attached to a building (other than structural components)Property which is in the nature of machinery (examples: gas pump, car lift etc..)

Section 1245 Property - Tangible Personal Property

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Section 1245 Property - Other Tangible Property

Used as an integral part of manufacturing, production, or extraction

Used as an integral part of furnishing transportation, communications, electrical energy, gas, water, or sewage disposal services by a person engaged in a trade or business of furnishing any such service

Constitutes a research or storage facility used in connection with any of the foregoing activities

Any other tangible property (but not including a building and its structural components)


Building Component vs Accessory to the Taxpayer’s Business

Does the property serve no more than an incidental relationship to the operation or maintenance of the building?

Relation to Machinery and EquipmentIs the property inextricably linked to specific equipment or is it reasonably adaptable to more general uses?

“ONE THING IS CLEAR, THE FEDERAL INCOME TAX LAW IS UNCLEAR REGARDING THE DISTINCTION BETWEEN PERSONAL AND REAL PROPERTY”

Real Property or Personal Property?

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“The determination of whether an asset is a structural component or tangible personal property is a facts and circumstances assessment”

“No bright line test exists”

Chief Counsel Advice 199921045In 1999, the IRS issued Chief Counsel Advice in response to Hospital Corp of America


Permanency Test (WhitecoTest) An item may qualify for a lower life if it is

easily removedis designed for easy removaldoes not require substantial effort to removehas an expected length of stay less than the overall life of the buildingdoes not create undo damage upon removalhas a history of removal.

Special Tests for Property Qualification

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Sole Justification TestAn item may qualify for a lower life even though it is structural component of a building if

it is necessary to meet specific temperature or humidity requirements essential for the operation of the machinery, or the processing of materials or foodstuffs



Accessory TestAn item may qualify as lower-life property, even though it is

permanently affixed, if it is an item necessary for the taxpayer to carry on his particular trade or activity.


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Unitary Concept TestWhen establishing the basis of an asset,

the entire asset as well as the supporting features such as electrical connection and plumbing connections, must be viewed as one single asset.



Incidental Use Test – An item may qualify for a lower life as tangible personal property, even though

it has some incidental use necessary for the operation or maintenance of a building. (Special Fire Suppression)


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KBKG White Papers

Movable Wall PartitionsHistory and process of reconfiguration

Freestanding Parking StructuresConstruction methods

Special Purpose StructuresRelationship to the equipment it houses


Tax Planning & Other Benefits

Leasehold ImprovementsReal Estate Professional1031 ExchangesEstate Tax BenefitsProperty Tax Issues

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Planning Opportunity - Lessee

Stipulate in the lease that the landlords allowance is for – 1250 property.

Increases the lessee’s ability to allocate more value to shorter life property. See Case Study


Real Estate Professional

QualificationOpportunity – losses offset even “ordinary”incomeNet Operating Losses may be eligible for carryback

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Tax Planning Opportunities and Issues

Pre 1031 planning

Post 1031 planning

State Law Prevails for 1031


REAL PROPLand

1250 (Bldg)1250(Land Imp)

1245 (non FF&E) 1031x

PERSONALPROP

1245 (FF&E)

PERSONALPROP

1245 (FF&E)

REAL PROPLand

1250 (Bldg)1250(Land Imp)

1245 (non FF&E)

1031 Exchange – Step 1 (State Law Controlling Definition)

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1031 Exchange – Step 2 (Address Recapture Issues by Fed Law)

1031x

PERSONALPROP

1245 (FF&E)

REAL PROP1245(non FF&E)

REAL PROPLand

1250 (Bldg)1250 (Land Imp)

PERSONALPROP

1245 (FF&E)

REAL PROP1245(non FF&E)

REAL PROPLand

1250 (Bldg)1250 (Land Imp)


Estate Tax Benefits

Using a cost segregation study as part of Estate Tax Planning

How can I depreciate the same property more than once?

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Estate Planning Concept Example –Year 1

Property acquired by husband and wife 5 years ago for $1M

Cost Segregation Study is performed and $200K of 5 year assets are segregated

3115 is filed and current year return includes a $200K 481 adjustment.


Estate Example – Year 2

Husband dies and property receives step up in basis to $2M.

Wife has cost segregation study performed and $400K in 5 year assets are segregated and depreciated over next 5 years.

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Property Tax Issues

Real vs. Personal PropertyState law vs. Federal LawsAppreciating tax base (real) vs. depreciating tax base (personal)Initial property assessment vs. subsequent adjustments


IRS Audit Issues

IRS will conduct the following steps if examining a Cost Segregation Study

Interview the preparerInspect the property Review a Copy of Study & ReportVerify cost basis and reconcile depreciation recordsReview and verify classes of propertyConduct a risk analysis to evaluate audit potential

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Interview The Preparer

Were the properties inspected at the time of the study?Were photographs relied upon when classifying property?What cost estimating guides were used?What documentation was used to establish the cost basis and use of a property item?How was the cost of each property item identified?Where are the workpapers?


Inspecting The PropertyAuditor will tour site and inspect questionable items.Auditor will request preparer to attend tour to explain physical attributes of specific assets how they were classified.Discuss methodology that was used to determine cost of assets. Were standard cost guides used to estimate costs?Auditor will ask on-site maintenance and facility operations personnel about local construction and repair costs in order to verify the estimated costs in a study.

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Case Study

Consider the following example:A company recently constructed a Restaurant for

$1,543,225. A Cost Segregation Study was subsequently performed and construction related costs were reclassified to the proper depreciable lives. The following pages detail the results.


Summary of Benefits

Tax savings assumes 45% combined rate

Without Cost Segregation (39 Years)

With Cost Segregation

(5 Years)

With Cost Segregation

(7 Years)

With Cost Segregation (15 Years)

With Cost Segregation (39 years)

Total Net Increase in

Benefits

Project-related costs identified $ 1,543,225 $ 558,155 $ 15,790 $ 47,531 $ 921,749

First 7 years depreciation $ 257,192 $ 558,155 $ 15,086 $ 23,675 $ 153,619 $ 493,343

Potential increase in first 7 years income tax deferral $ 222,004 Potential net present value over the life of the project $ 150,758

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Qualifying an OpportunityGenerally:

Basis in “building” (less land cost) > $750,000Can be less than $750,000 if there are multiple properties

Basis in leasehold improvements > $400,000

Placed in service after 1987Ideally placed in service 5-7 years ago

Taxpayer must need deductions!


Qualifying an OpportunityInformation needed for an accurate estimate of savings:

Type of Property/Nature of IndustryPlaced in Service DateInvolvement in a 1031 exchange? Property Cost BasisSquare Footage of Building and SiteNumber of Tenants? (if leased)Type of Parking?Major Renovations/Improvements made?Are blue prints available?

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Qualifying an OpportunityThe following information should also be submitted to a cost segregation expert for an accurate estimate

Original Construction Cost Detail

Depreciation Schedule

Appraisals (if convenient)

Rent Roll

ESTIMATE OF POTENTIAL TAX SAVINGS AND FEE

Client: Sample ClientProperty: Example - Freestanding Apartment Building, Acquisition Date of Quote: 11/8/2006

Tax Life

Additional Tax Deductions Year 1 $79,886 5-year property $0 0% $400,000 16%

Increased Cash Flow Year 1 $32,753 7-year property $0 0% $0 0%

Additional Tax Deductions Years 1-5 $359,447 15-year property $0 0% $225,000 9%

Increased Cash Flow Years 1-5 $147,373 Real property $2,500,000 100% $1,875,000 75%

Net Present Value (after tax) $94,899 Total Basis $2,500,000 100% $2,500,000 100%

Benefit to Cost Ratio 27 : 1

KBKG Fee @ Standard Rates $6,000 KBKG Fee with Volume Discount $6,000 After Tax Cost $3,540

Building Cost Basis (excluding land) $2,500,000

Year Placed in Service 2006

Current Tax Year 2006

Combined Tax Rate 41%

Discount Rate 8%

Summary of Benefits

Project Information

Estimate of AllocationsAfter Cost SegregationBefore Cost Segregation

Costs

$ Increased Cash Flow By Year $

($20,000)

($10,000)

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

2006 2011 2016 2021 2026 2031Year

Cas

h

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Client: Sample Client Additional Tax Deductions Year 1 $79,886

Property: Example - Freestanding Apartment Building, Acquisition Increased Cash Flow Year 1 $32,753

Date of Quote: Additional Tax Deductions Years 1-5 $359,447

Increased Cash Flow Years 1-5 $147,373

Net Present Value (after tax) $94,899Tax Life 5 Year 7 Year 15 Year 27.5 Year Total 5 Year 7 Year 15 Year 27.5 Year Total Benefit to Cost Ratio 27 : 1

% Reclass 0% 0% 0% 100% 100% 16% 0% 9% 75% 100%

Basis 0 0 0 2,500,000 $2,500,000 400,000 0 225,000 1,875,000 $2,500,000

KBKG Estimated Fee @ Standard Rates $6,000KBKG Fee with Volume Discount 0% $6,000

KBKG Estimated Fee After Tax $3,540

Building Total (excludes Land $) $2,500,000Tax Rate* 41%

Present Value Factor 8%Current Tax Year 2006

Year 5 Year 7 Year 15 Year 27.5 Year 5 Year 7 Year 15 Year 27.5 Year Yeara b c d e=a+b+c+d f g h i j=f+g+h+i k=j-e l=k*tax rate m=l*PV factor

1 0 0 0 45,455 45,455 80,000 0 11,250 34,091 125,341 79,886 32,753 32,753 20062 0 0 0 90,909 90,909 128,000 0 21,375 68,182 217,557 126,648 51,926 48,079 20073 0 0 0 90,909 90,909 76,800 0 19,238 68,182 164,219 73,310 30,057 25,769 20084 0 0 0 90,909 90,909 46,080 0 17,314 68,182 131,576 40,666 16,673 13,236 20095 0 0 0 90,909 90,909 46,080 0 15,584 68,182 129,845 38,936 15,964 11,734 20106 0 0 0 90,909 90,909 23,040 0 14,024 68,182 105,246 14,337 5,878 4,001 20117 0 0 90,909 90,909 0 13,286 68,182 81,468 (9,441) (3,871) (2,439) 20128 0 0 90,909 90,909 0 13,286 68,182 81,468 (9,441) (3,871) (2,259) 20139 0 90,909 90,909 13,286 68,182 81,468 (9,441) (3,871) (2,091) 2014

10 0 90,909 90,909 13,286 68,182 81,468 (9,441) (3,871) (1,936) 201511 0 90,909 90,909 13,286 68,182 81,468 (9,441) (3,871) (1,793) 201612 0 90,909 90,909 13,286 68,182 81,468 (9,441) (3,871) (1,660) 201713 0 90,909 90,909 13,286 68,182 81,468 (9,441) (3,871) (1,537) 201814 0 90,909 90,909 13,286 68,182 81,468 (9,441) (3,871) (1,423) 201915 0 90,909 90,909 13,286 68,182 81,468 (9,441) (3,871) (1,318) 202016 0 90,909 90,909 6,640 68,182 74,822 (16,088) (6,596) (2,079) 202117 90,909 90,909 68,182 68,182 (22,727) (9,318) (2,720) 202218 90,909 90,909 68,182 68,182 (22,727) (9,318) (2,518) 202319 90,909 90,909 68,182 68,182 (22,727) (9,318) (2,332) 202420 90,909 90,909 68,182 68,182 (22,727) (9,318) (2,159) 202521 90,909 90,909 68,182 68,182 (22,727) (9,318) (1,999) 202622 90,909 90,909 68,182 68,182 (22,727) (9,318) (1,851) 202723 90,909 90,909 68,182 68,182 (22,727) (9,318) (1,714) 202824 90,909 90,909 68,182 68,182 (22,727) (9,318) (1,587) 202925 90,909 90,909 68,182 68,182 (22,727) (9,318) (1,469) 203026 90,909 90,909 68,182 68,182 (22,727) (9,318) (1,361) 203127 90,909 90,909 68,182 68,182 (22,727) (9,318) (1,260) 203228 90,909 90,909 68,182 68,182 (22,727) (9,318) (1,167) 2033

Total 0 0 0 2,500,000 2,500,000 400,000 0 225,000 1,875,000 2,500,000 0 (0) 94,899

Summary of Benefits

Total Deductions After Study

Total Deductions

Before Study

After-Tax Increase in Cash Flow

Present Value of Cash

Flow

Increase in Depreciation

Expense

After Cost Segregation Study

Estimate of Fees

11/2/2006

Deductions by Year Before Cost Segregation Deductions by Year After Cost Segregation

Before Cost Segregation Study

5 Year 7 Year 15 Year 27.5 Year 5 Year 7 Year 15 Year 27.5 Year


Interactive Savings Calculator

Perform your own thumbnail calculation without having to contact a specialist with the following information:

Purchase price / cost basis Year place in service Property type / usageParking type Size of property

Access from the homepage of www.costsegregation.biz/

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A Competitive Advantage

Offering Cost Segregation or recommending Cost Segregation gives practitioners a competitive advantage.

Value added service, helps retain clientsSolicit new business using cost segregation strategy that the competition might not have addressedDon’t wait for your client to bring the idea to you.


Where to find opportunities?

Mining your own client baseReal Estate Partnerships & LLCsClients w/ K-1’s involving Real EstateIndividuals w/ Schedule E Activity

Property Management CompaniesCommercial Development and BrokeragesHow might you approach it?

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Revenue Opportunities

CPAs and tax advisors can create significant savings for their clients and generate additional billings for the additional tax work.

•Preparation of Form 3115

•Recalculation of Depreciation

•Fixed asset studies

•Abandonment Studies

•Property Tax Work


Considerations When Comparing Cost Segregation Services

Does the company have the appropriate tax background? Do they employ CPAs?Do they employ engineers as preferred by the IRS (not appraisers)?Do they understand tax related Abandonment issuesAre they knowledgeable on issues involved with a 1031 exchange and how it interacts with Cost Segregation?Do they have the expertise to file, or help you with, the IRS Form 3115 procedures?Do they understand how cost segregation can affect estate taxes, passive loss situations, IRS Section 179 deductions, NOL situations, Code Section 168(k), Section 754 Step Ups, and other tax situations? Does the cost of the study include time for audit support?

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Contact

Gian Pazzia, Civil EngineerShareholder(626) 449-4225 x150;[email protected]

www.costsegregation.biz

CASE STUDYSample Restaurant

General Contractors Schedule of Values Total Construction 1,543,225.00$

Reclass Recovery Schedule AllocatedDate Vendor/Source Description % Period Value Cost 39 Year 15 Year 7 Year 5 Year Soft Cost

11/17/2004 GC-PAY APP Carpentry/Rough 39 Year 5,000.00 5,000 5,000 - - - - 11/17/2004 GC-PAY APP Ceiling System 39 Year 13,010.00 13,010 13,010 - - - - 11/17/2004 GC-PAY APP Concrete 73.02% 39 Year 59,989.00 43,806 43,806 - - - - 11/17/2004 GC-PAY APP Concrete (Patio) 15.28% 15 Year 9,166 - 9,166 - - - 11/17/2004 GC-PAY APP Concrete (Freezer Floor System) 11.70% 5 Year 7,017 - - - 7,017 - 11/17/2004 GC-PAY APP Demolition Soft Cost 3,500.00 3,500 - - - - 3,500 11/17/2004 GC-PAY APP Drywall (& Rough Carpentry) 39 Year 119,435.00 119,435 119,435 - - - 11/17/2004 GC-PAY APP Electrical 53.50% 39 Year 171,000.00 91,479 91,479 - - - - 11/17/2004 GC-PAY APP Electrical (1245 Estimates) 46.50% 5 Year 79,521 - - - 79,521 - 11/17/2004 GC-PAY APP Special Inspection/Engr. Soft Cost 5,740.00 5,740 - - - - 5,740 11/17/2004 GC-PAY APP Fire Protection 39 Year 22,500.00 22,500 22,500 - - - - 11/17/2004 GC-PAY APP Flooring, Wood/VCT 55.51% 39 Year 32,899.00 18,261 18,261 - - - - 11/17/2004 GC-PAY APP Flooring, Wood/VCT (Vinyl Flooring) 44.49% 5 Year 14,638 - - - 14,638 - 11/17/2004 GC-PAY APP Wood Floor Protection 39 Year 6,783.00 6,783 6,783 - - - - 11/17/2004 GC-PAY APP Protect All Kitchen (Safety Floor) 5 Year 30,850.00 30,850 - - - 30,850 - 11/17/2004 GC-PAY APP Hardware / Rough 39 Year 500.00 500 500 - - - - 11/17/2004 GC-PAY APP HVAC 62.43% 39 Year 149,390.00 93,259 93,259 - - - - 11/17/2004 GC-PAY APP HVAC (1245 Estimates) 37.57% 5 Year 56,131 - - - 56,131 - 11/17/2004 GC-PAY APP Insulation 39 Year 5,082.00 5,082 5,082 - - - - 11/17/2004 GC-PAY APP Grease Duct Wrap 5 Year 2,392.00 2,392 - - - 2,392 - 11/17/2004 GC-PAY APP FRP (Kitchen Sanitary Wall Panels) 5 Year 6,908.00 6,908 - - - 6,908 - 11/17/2004 GC-PAY APP Millwork 30.55% 39 Year 252,971.00 77,287 77,287 - - - - 11/17/2004 GC-PAY APP Millwork (1245 Estimate) 5.23% 7 Year 13,227 - - 13,227 - - 11/17/2004 GC-PAY APP Millwork (1245 Estimate) 64.22% 5 Year 162,456 - - - 162,456 - 11/17/2004 GC-PAY APP Painting 39 Year 48,250.00 48,250 48,250 - - - - 11/17/2004 GC-PAY APP Plumbing 59.70% 39 Year 118,900.00 70,989 70,989 - - - - 11/17/2004 GC-PAY APP Plumbing (1245 Estimate) 40.30% 5 Year 47,911 - - - 47,911 - 11/17/2004 GC-PAY APP Roof Surfaces Shingle 39 Year 15,510.00 15,510 15,510 - - - - 11/17/2004 GC-PAY APP Gutters & Down Spouts 39 Year 8,362.00 8,362 8,362 - - - - 11/17/2004 GC-PAY APP Steel / Structural 65.17% 39 Year 88,000.00 57,350 57,350 - - - - 11/17/2004 GC-PAY APP Steel / Structural (Exterior Dining Canopy) 34.83% 15 Year 30,650 - 30,650 - - - 11/17/2004 GC-PAY APP Steel / Misc 39 Year 18,750.00 18,750 18,750 - - - - 11/17/2004 GC-PAY APP Plant Hangers 5 Year 3,150.00 3,150 - - - 3,150 - 11/17/2004 GC-PAY APP Aluminum Casting (Decorative Columns Dwg A8.1) 5 Year 12,903.00 12,903 - - - 12,903 - 11/17/2004 GC-PAY APP Tile / Ceramic / Quarry 39 Year 27,656.00 27,656 27,656 - - - - 11/17/2004 GC-PAY APP Toilet Partitions 39 Year 8,732.00 8,732 8,732 - - - - 11/17/2004 GC-PAY APP Caulking 39 Year 1,000.00 1,000 1,000 - - - - 11/17/2004 GC-PAY APP Clean Up / General Labor Soft Cost 6,000.00 6,000 - - - - 6,000 11/17/2004 GC-PAY APP Dumpster Soft Cost 3,000.00 3,000 - - - - 3,000 11/17/2004 GC-PAY APP Safety / Security Soft Cost 500.00 500 - - - - 500 11/17/2004 GC-PAY APP Small Tools / Supplies Soft Cost 500.00 500 - - - - 500 11/17/2004 GC-PAY APP Project Supervision Soft Cost 55,000.00 55,000 - - - - 55,000 11/17/2004 GC-PAY APP Telephone / Postage Soft Cost 2,000.00 2,000 - - - - 2,000

Property Classifications & Soft Cost Allocation

GC Schedule1


General Contractors Schedule of Values Total Construction 1,543,225.00$

Reclass Recovery Schedule AllocatedDate Vendor/Source Description % Period Value Cost 39 Year 15 Year 7 Year 5 Year Soft Cost

Property Classifications & Soft Cost Allocation

11/17/2004 GC-PAY APP Temporary Facilities Soft Cost 2,000.00 2,000 - - - - 2,000 11/17/2004 GC-PAY APP Final Cleanup - Prof Jan Soft Cost 5,000.00 5,000 - - - - 5,000 11/17/2004 GC-PAY APP Fire Extinguisher (Kitchen) 5 Year 1,500.00 1,500 - - - 1,500 - 11/17/2004 GC-PAY APP Awning 5 Year 11,867.00 11,867 - - - 11,867 - 11/17/2004 GC-PAY APP Roto Rooter Soft Cost 500.00 500 - - - - 500 11/17/2004 GC-PAY APP Termite Protection Soft Cost 1,200.00 1,200 - - - - 1,200 11/17/2004 GC-PAY APP Radiant Heating System (Patio Heat System) 5 Year 26,400.00 26,400 - - - 26,400 - 11/17/2004 GC-PAY APP Architectural Soft Cost 8,500.00 8,500 - - - - 8,500 11/17/2004 GC-PAY APP Insurance Soft Cost 13,522.00 13,522 - - - - 13,522 11/17/2004 GC-PAY APP Office Supplies Soft Cost 500.00 500 - - - - 500 11/17/2004 GC-PAY APP General Supervision Soft Cost 13,600.00 13,600 - - - - 13,600 11/17/2004 GC-PAY APP Travel Expense Soft Cost 3,000.00 3,000 - - - - 3,000 11/17/2004 GC-PAY APP Change Toilet Partitions to SS 39 Year 4,316.00 4,316 4,316 - - - - 11/17/2004 GC-PAY APP Profit 39 Year 431.60 432 432 - - - - 11/17/2004 GC-PAY APP Miscellaneous Plumbing Changes 39 Year 1,991.38 1,991 1,991 - - - - 11/17/2004 GC-PAY APP Profit 39 Year 199.14 199 199 - - - - 11/17/2004 GC-PAY APP Revisions to Glass and office cabinetry 5 Year 3,218.00 3,218 - - - 3,218 - 11/17/2004 GC-PAY APP Profit 5 Year 321.80 322 - - - 322 - 11/17/2004 GC-PAY APP Floor Changes 39 Year (17,309.00) (17,309) (17,309) - - - - 11/17/2004 GC-PAY APP Profit 39 Year (865.45) (865) (865) - - - - 11/17/2004 GC-PAY APP Increase cost for painting changes 39 Year 8,845.00 8,845 8,845 - - - - 11/17/2004 GC-PAY APP Profit 39 Year 884.50 885 885 - - - - 11/17/2004 GC-PAY APP Credit for overcharge in profit Soft Cost (918.52) (919) - - - - (919) 11/17/2004 GC-PAY APP Add backing at bar area 5 Year 360.00 360 - - - 360 - 11/17/2004 GC-PAY APP Profit 5 Year 18.00 18 - - - 18 - 11/17/2004 GC-PAY APP Sealer for concrete floor 39 Year 2,528.00 2,528 2,528 - - - - 11/17/2004 GC-PAY APP Profit 39 Year 126.40 126 126 - - - - 11/17/2004 GC-PAY APP Added concrete landlord was to install 39 Year 1,800.00 1,800 1,800 - - - - 11/17/2004 GC-PAY APP Profit 39 Year 90.00 90 90 - - - - 11/17/2004 GC-PAY APP Upsize units, change sheave & rebalance 39 Year 15,335.38 15,335 15,335 - - - - 11/17/2004 GC-PAY APP Profit 39 Year 766.77 767 767 - - - - 11/17/2004 GC-PAY APP Overhead and Profit @ 10% Soft Cost 127,335.00 127,335 - - - - 127,335

Total AIA Costs Per Documentation: 1,543,225.00 1,543,225 772,141 39,816 13,227 467,561 250,478 AIA Soft Cost Allocation: 149,608 7,715 2,563 90,593 (250,478)

TOTAL AIA RECLASSIFICATION: 921,750 47,531 15,790 558,155 -

59.73% 3.08% 1.02% 36.17%

GC Schedule2


ENGINEERING ESTIMATES

Location Factor: 1.08Time Factor 1.00

Type Description Dwg No. Qty Unit Unit Cost Cost Cost Source Period Allocated Cost 39 Year 15 Year 7 Year 5 YearConcrete Client 1 LS 59,989.00 43,806.29 Actual Cost 39 Year 43,806 43,806 - - -

Freezer Floating Concrete Slab K-9 776 sf 4.90 4,103 13037003800 5 Year 4,103 0 0 0 4,103Freezer Floor Insulation 4" K-9 776 sf 3.48 2,914 13037004100 5 Year 2,914 0 0 0 2,914Exterior Dining Area - Concrete Pad TS 1,699 sf 5.00 9,166 KBKG 15 Year 9,166 0 9,166 0 0Total Estimated Costs 59,989 59,989 43,806 9,166 0 7,017

73.02% 15.28% 0.00% 11.70%

Electrical Client 1 LS 171,000.00 Actual CostGeneral Building Electrical E2 9,274 sf 18.49 78,567 M&S 43/5 39 Year 72,612 72,612 0 0 0Service and Distribution - General Use (34.46%) E2 9,274 sf 2.04 20,414 RD5010110 39 Year 18,867 18,867 0 0 0Service and Distribution - Equipment (65.54%) E2 9,274 sf 3.88 38,825 RD5010110 5 Year 35,883 0 0 0 35,883Lounge Plasma Screens - Hookups K3.1 4 ea 150.00 647 168506000600 5 Year 598 0 0 0 598Ceiling Fan E2 16 ea 225.00 3,884 KBKG 5 Year 3,590 0 0 0 3,590Ceiling Fan Pwr E2 212 lf 4.65 1,064 KBKG 5 Year 983 0 0 0 983Office - Voice Data Jacks E2 5 ea 195.00 1,052 M&S 5 Year 972 0 0 0 972Office Equipment Dedicated Outlets E2 5 ea 213.00 1,149 M&S 5 Year 1,062 0 0 0 1,062POS Equipment Dedicated Outlets E2 5 ea 230.00 1,241 M&S 5 Year 1,147 0 0 0 1,147Kitchen Equipment Dedicated Hookups E2 78 ea 225.00 18,936 M&S 5 Year 17,501 0 0 0 17,501Kitchen Equipment Pwr E2 78 ea 4.65 391 M&S 5 Year 362 0 0 0 362Kitchen HVAC Dedicated Hookups E2 7 ea 225.00 1,699 M&S 5 Year 1,571 0 0 0 1,571Kitchen HVAC Pwr E2 958 ea 4.65 4,807 M&S 5 Year 4,442 0 0 0 4,442Track for Spot light Fixtures E2 32 lf 22.50 777 165508200200 5 Year 718 0 0 0 718Accent Spot Light Fixtures E2 19 ea 210.00 4,305 165508200200 5 Year 3,979 0 0 0 3,979Accent Spot Light Fixtures Feed Kit E2 8 ea 62.50 540 165508200200 5 Year 499 0 0 0 499Accent Spot Light Fixtures Pwr E2 250 lf 4.65 1,254 KBKG 5 Year 1,159 0 0 0 1,159Decretive Exterior Building Mount Light E2 11 ea 405.00 4,807 165203001190 5 Year 4,443 0 0 0 4,443Decretive Exterior Building Mount Light Pwr E2 132 lf 4.65 662 KBKG 5 Year 612 0 0 0 612Total Estimated Costs 185,023 171,000 91,479 0 0 79,521

53.50% 0.00% 0.00% 46.50%

Flooring, Wood/VCT Client 1 LS 32,899.00 18,261.29 Actual Cost 39 Year 18,261 18,261 - - - Vinyl Floor Covering ID3.1 4,522 sf 3.00 14,638 96581007800 5 Year 14,638 0 0 0 14,638Total Estimated Costs 32,899 32,899 18,261 0 0 14,638

55.51% 0.00% 0.00% 44.49%

Estimates3




Type Description Dwg No. Qty Unit Unit Cost Cost Cost Source Period Allocated Cost 39 Year 15 Year 7 Year 5 YearHVAC Client 1 LS 149,390.00 Actual Cost

General Building HVAC M1 9,274 sf 15.00 93,702 M&S 43/5 39 Year 93,259 93,259 0 0 0Kitchen - Make-Up Air Unit 6000 CFM M1 2 ea 9,150.00 19,746 157205000160 5 Year 19,652 0 0 0 19,652MAU Air Duct 16" D M2 167 lf 28.00 5,045 158101005920 5 Year 5,022 0 0 0 5,022MAU Air Duct 22" D M2 129 lf 36.00 5,011 158101005950 5 Year 4,987 0 0 0 4,987MAU Hood 20" x 12" M2 8 ea 85.00 734 158203006070 5 Year 730 0 0 0 730Kitchen - Exhaust Fan 2400 CFM M1 1 ea 3,325.00 3,588 158301005540 5 Year 3,571 0 0 0 3,571Kitchen - Exhaust Fan 7400 CFM M1 2 ea 7,775.00 16,778 158301005580 5 Year 16,699 0 0 0 16,699Kitchen - Exhaust Fan 1500 CFM M1 1 ea 3,675.00 3,965 158301004660 5 Year 3,947 0 0 0 3,947Kitchen - Exhaust Fan 1400 CFM Direct Drive M1 1 ea 560.00 604 158301006160 5 Year 601 0 0 0 601Kitchen - Exhaust Fan 500 CFM Direct Drive M1 1 ea 400.00 432 KBKG 5 Year 430 0 0 0 430Kitchen - Exhaust Fan 400 CFM Direct Drive M1 1 ea 365.00 394 158301006100 5 Year 392 0 0 0 392Kitchen - Exhaust Hood Duct M2 17 lf 5.50 101 158101000560 5 Year 100 0 0 0 100Total Estimated Costs 150,100 149,390 93,259 0 0 56,131

62.43% 0.00% 0.00% 37.57%Millwork Client 1 LS 252,971.00 Actual Cost

Rough Carpentry - Also included in "drywall contract" TS 9,274 sf 12.00 36,687 M&S 43/5 39 Year 77,287 77,287 0 0 0Bar Counter / Woodwork A2.0 27 lf 500.00 14,567 KBKG 5 Year 30,687 0 0 0 30,687Crown Molding A2.0 481 lf 12.00 6,228 62204502600 5 Year 13,120 0 0 0 13,120Wall Panels - Wainscoting & Chair Rail A2.0 2,405 sf 9.50 24,652 62505004300 5 Year 51,935 0 0 0 51,935Décor Ceiling Panels / Wood Work A2.0 4,522 sf 4.50 21,957 62505004000 5 Year 46,256 0 0 0 46,256Base Cabinets - Office A2.0 23 lf 143.00 3,549 64101000400 7 Year 7,476 0 0 7,476 0Upper Cabinets - Office A2.0 23 lf 110.00 2,730 123107502500 7 Year 5,751 0 0 5,751 0Cabinets - Dining Area A2.0 36 lf 250.00 9,711 64101009560 5 Year 20,458 0 0 0 20,458Total Estimated Costs 120,080 252,971 77,287 0 13,227 162,456

30.55% 0.00% 5.23% 64.22%

Plumbing (1245 Estimate) Client 1 LS 118,900.00 Actual CostGeneral Building Plumbing P2 9,274 sf 16.00 95,591 M&S 43/4 39 Year 70,989 70,989 0 0 0Beer Cooler - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120Ice Machine - Rough In P1 1 ea 350.00 378 KBKG 5 Year 280 0 0 0 280Ice Bin - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120Trough Drain - Rough In P1 1 ea 200.00 216 KBKG 5 Year 160 0 0 0 160Soda System - Rough In P1 1 ea 500.00 540 KBKG 5 Year 401 0 0 0 401Hand Sink - Rough In P1 1 ea 300.00 324 KBKG 5 Year 240 0 0 0 240Cooler Coil - Rough In P1 1 ea 200.00 216 KBKG 5 Year 160 0 0 0 160Freezer Coil - Rough In P1 1 ea 200.00 216 KBKG 5 Year 160 0 0 0 160Freezer Coil - Rough In P1 1 ea 200.00 216 KBKG 5 Year 160 0 0 0 160Cooler Coil - Rough In P1 1 ea 200.00 216 KBKG 5 Year 160 0 0 0 160Range/Oven - Rough In P1 1 ea 300.00 324 KBKG 5 Year 240 0 0 0 240Trough Faucet - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120Dishwasher - Rough In P1 1 ea 510.00 550 154186001490 5 Year 409 0 0 0 409Disposer - Rough In P1 1 ea 550.00 593 KBKG 5 Year 441 0 0 0 441Rack Over - Rough In P1 1 ea 500.00 540 KBKG 5 Year 401 0 0 0 401Fill Faucet - Rough In P1 1 ea 200.00 216 KBKG 5 Year 160 0 0 0 160Hood Drain - Rough In P1 1 ea 200.00 216 KBKG 5 Year 160 0 0 0 160

Estimates4




Type Description Dwg No. Qty Unit Unit Cost Cost Cost Source Period Allocated Cost 39 Year 15 Year 7 Year 5 YearAuto Gas Shut-off - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120Range Oven - Rough In P1 1 ea 300.00 324 KBKG 5 Year 240 0 0 0 240Tilting Skillet - Rough In P1 1 ea 200.00 216 KBKG 5 Year 160 0 0 0 160Fill Faucet - Rough In P1 1 ea 200.00 216 KBKG 5 Year 160 0 0 0 160Conventional Oven - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120Booster Heater - Rough In P1 1 ea 350.00 378 KBKG 5 Year 280 0 0 0 280Holding Cabinet - Rough In P1 1 ea 200.00 216 KBKG 5 Year 160 0 0 0 1608 Burner/Oven - Rough In P1 1 ea 600.00 647 KBKG 5 Year 481 0 0 0 481Griddle - Rough In P1 1 ea 250.00 270 KBKG 5 Year 200 0 0 0 200Cheese Melter - Rough In P1 1 ea 300.00 324 KBKG 5 Year 240 0 0 0 240Fryer Assembly - Rough In P1 1 ea 500.00 540 KBKG 5 Year 401 0 0 0 401Dipper Well - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120Hot Food Unit - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120Dipper Well - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120Hot Food Unit - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120Soda Tower - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120Beverage Sink - Rough In P1 1 ea 350.00 378 KBKG 5 Year 280 0 0 0 280Coffee Brewer - Rough In P1 1 ea 350.00 378 KBKG 5 Year 280 0 0 0 280Ice Tea Brewer - Rough In P1 1 ea 350.00 378 KBKG 5 Year 280 0 0 0 280Soup Wells - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120BBQ Oven - Rough In P1 1 ea 80.00 86 KBKG 5 Year 64 0 0 0 64Beer Tower - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120Soda Gun - Rough In P1 1 ea 300.00 324 KBKG 5 Year 240 0 0 0 240Refrigerator - Rough In P1 1 ea 500.00 540 KBKG 5 Year 401 0 0 0 401Refrigerator - Rough In P1 1 ea 500.00 540 KBKG 5 Year 401 0 0 0 401Cooler Coil - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120Meat Sink - Rough In P1 1 ea 350.00 378 KBKG 5 Year 280 0 0 0 280Vegetable Sink - Rough In P1 1 ea 350.00 378 KBKG 5 Year 280 0 0 0 280Bakery Sink - Rough In P1 1 ea 350.00 378 KBKG 5 Year 280 0 0 0 2803-Comp Pot Sink - Rough In P1 1 ea 485.00 523 KBKG 5 Year 389 0 0 0 389Soiled Dishtable - Rough In P1 1 ea 300.00 324 KBKG 5 Year 240 0 0 0 240Bain Maries - Rough In P1 1 ea 450.00 486 KBKG 5 Year 361 0 0 0 361Refrigerator Base - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120Freezer Base - Rough In P1 1 ea 150.00 162 KBKG 5 Year 120 0 0 0 120Chef's Sink - Rough In P1 1 ea 350.00 378 KBKG 5 Year 280 0 0 0 280Refrigerator Base - Rough In P1 1 ea 500.00 540 KBKG 5 Year 401 0 0 0 401Refrigerator Rail - Rough In P1 1 ea 500.00 540 KBKG 5 Year 401 0 0 0 401Jockey Station - Rough In P1 1 ea 300.00 324 KBKG 5 Year 240 0 0 0 240Underbar Sink - Rough In P1 1 ea 200.00 216 KBKG 5 Year 160 0 0 0 160Underbar Sink - Rough In P1 1 ea 200.00 216 KBKG 5 Year 160 0 0 0 160Underbar Station - Rough In P1 1 ea 200.00 216 KBKG 5 Year 160 0 0 0 160Jockey Station - Rough In P1 1 ea 300.00 324 KBKG 5 Year 240 0 0 0 240Kitchen - Vent Pipe P2 180 lf 21.50 4,176 151073202140 5 Year 3,101 0 0 0 3,101Kitchen - Gas Pipe 4" P2 54 lf 38.00 2,214 151076200650 5 Year 1,644 0 0 0 1,644Kitchen - Gas Pipe 3" P2 18 lf 28.50 554 151076200630 5 Year 411 0 0 0 411Kitchen - Gas Pipe 1 1/2" P2 8 lf 13.80 119 151076200600 5 Year 88 0 0 0 88Kitchen - Gas Pipe 1 1/4" P2 36 lf 12.35 480 151076200590 5 Year 356 0 0 0 356

Estimates5




Type Description Dwg No. Qty Unit Unit Cost Cost Cost Source Period Allocated Cost 39 Year 15 Year 7 Year 5 YearKitchen - Gas Pipe 1" P2 68 lf 11.20 822 151076200580 5 Year 610 0 0 0 610Kitchen - Gas Piping Valves & Connections P2 0.25 ls 4,188.25 1,130 RSM 5 Year 839 0 0 0 839Kitchen - Gas Pressure Regulator 1" P2 1 ea 112.00 121 151206700136 5 Year 90 0 0 0 90Kitchen - Gas Pressure Regulator 1 1/4" P2 1 ea 315.00 340 151206700137 5 Year 252 0 0 0 252Kitchen - Gas Rough In P2 15 ea 265.00 4,289 M&S 53/9 5 Year 3,185 0 0 0 3,185Kitchen - Waste Piping 3" P2 50 lf 19.65 1,060 151085204470 5 Year 787 0 0 0 787Kitchen - Waste Piping 2" P2 354 lf 16.60 6,341 151085204460 5 Year 4,709 0 0 0 4,709Kitchen - Waste Piping Valves & Connections P2 0.25 ls 7,400.75 1,996 RSM 5 Year 1,483 0 0 0 1,483Kitchen - Clean Out Tee P2 15 ea 232.00 3,755 151502500200 5 Year 2,789 0 0 0 2,789Kitchen - Floor Drain P2 18 ea 157.00 3,049 151503002040 5 Year 2,264 0 0 0 2,264Kitchen - Floor Clean Out P2 14 ea 131.00 1,979 151502000100 5 Year 1,470 0 0 0 1,470Kitchen - Floor Sink P2 18 ea 325.00 6,312 KBKG 5 Year 4,688 0 0 0 4,688Kitchen - Water Pipe 2" P2 30 lf 16.00 518 151074202260 5 Year 385 0 0 0 385Kitchen - Water Pipe 1 1/2" P2 22 lf 12.45 296 151074202240 5 Year 219 0 0 0 219Kitchen - Water Pipe 1 1/4" P2 70 lf 10.90 823 151074202220 5 Year 611 0 0 0 611Kitchen - Water Pipe 1" P2 188 lf 9.05 1,836 151074202200 5 Year 1,363 0 0 0 1,363Kitchen - Water Pipe 3/4" P2 104 lf 7.80 875 151074202180 5 Year 650 0 0 0 650Kitchen - Water Pipe 1/2" P2 143 lf 6.95 1,072 151074202140 5 Year 796 0 0 0 796Kitchen - Water Piping Valves & Connections P2 0.25 ls 5,420.19 1,462 KBKG 5 Year 1,086 0 0 0 1,086Kitchen - Water Piping Insulation P2 0.10 ls 6,882.29 743 150806000100 5 Year 551 0 0 0 551Total Estimated Costs 160,106 118,900 70,989 0 0 47,911

59.70% 0.00% 0.00% 40.30%

Steel / Structural Client 1 LS 88,000.00 Actual CostGeneral Building Structural Steel TS 9,274 sf 6.77 67,745 M&S 43/2 39 Year 57,350 57,350 0 0 0Canopy TS 1,699 sf 19.75 36,206 M&S 43/9 15 Year 30,650 0 30,650 0 0Total Estimated Costs 103,951 88,000 57,350 30,650 0 0

65.17% 34.83% 0.00% 0.00%

Estimates6