Cost Segregation on New buildings

[equinecpa]

When a client has new construction should we be separating out costs of different building components when we have that cost? Will it make life easier down the road if we need to retire a component?

For example I'm doing a return where a client built a barn. They installed hot water heater and automatic waterers. Since I have the costs I'm thinking I should break them out separately. I do plan on depreciating over the life of building.

Good idea or needless itemization?

Carolyn

[TXEA]

I am doing the same thing on new construction. It will greatly facilitate things down the line.

[Gretel]

Here is my take: For purpose of partial disposition the job cost report for a new construction should provide all the information needed. I would depreciate furniture and carpet over a lower life, and of course the appliances if provided.

A cost segregation provides a much higher % of lower life assets. If bonus depreciation is still around that amount could be substantial. However, due to passive activity limitations the taxpayer might not benefit from it.

[ttbtaxes]

Wouldn't the initial carpeting put down be part of the building cost whereas subsequent carpet installation a 1245 asset?