The Tangible Property Regulations, which came into effect in their final form on September 19, 2013, present a significant opportunity for property owners to use the Unit of Property information as an important benchmark to determine whether future expenditures can be expensed vs. capitalized. While a properly prepared or upgraded Cost Segregation Study can provide this information, some property owners have chosen not to perform these studies due to relatively low depreciable basis, duration of ownership or cost of the study. Since most property owners may be required to adopt Unit of Property treatment, in order to take advantage of the regulations, this creates somewhat of a challenge in terms of attaining a certain level of compliance without “breaking the bank”.
The Unit of Property Scan (UoP Scan) is designed with this in mind. Our approach involves the analysis of your depreciation schedules coupled with the review of any readily available property information and client questionnaire to determine an engineered-based analysis of the building’s structure and systems as defined by the IRS. The UoP Scan will serve as a useful document for the entire ownership period of the building and will assist the owner and their tax professionals to ensure compliance with the new regulations in an efficient and cost-effective manner. The UoP Scan meets the “reasonable method” requirements as defined by the IRS and fills the void for those property owners who have chosen not to have Cost Segregation Studies performed on their properties.