Chattel With Us.

Myths About Chattel and Cost Segregation Studies

1. My accountant probably did one.
Many CPA's do not have the resources to conduct and produce a true Cost Segregation Study. Many CPA's have also have not had a resource to perform the Chattel Appraisal at an affordable price.

2. A Chattel Appraisal/Cost Segregation Study will not save me any money.
A conservative estimate of the amount of Chattel in any property is 10% of the purchase price. Looking at a $200,000 purchase price, there is conservatively, $20,000 in Chattel. In a 25% tax bracket, this results in a $5000 savings!!

3. I don't have any assets that qualify as Chattel.
Every residential rental property has Chattel. Although we estimate 10% of the purchase price being Chattel, our experience has been seeing a much higher percentage.

4. My chances of being audited will increase.
Not according to the IRS. The IRS has issued a publication to follow in order to properly record the depreciable lives. Keep in mind that you will be using a correct accounting method and the changes made are generally black and white issues in the Tax Code. In addition, Chattel With Us has partnered with a 70 year old company cited in the IRS Code for this deduction.

5. There is no support if the IRS does perform an audit.
There are over 75 IRS rulings, procedures, and court cases which allow for Chattel/Cost Segregation Studies. The report we compile is done in partnership with a 70 year old company listed in the IRS Code.

6. A Chattel Appraisal/Cost Segregation Study will complicate estate planning.
Yes it might, but the rewards of performing a study have great financial benefits if the owner of the building dies before the building is fully depreciated. Due to the "step-up in basis" rules, it is one of the rare times a taxpayer can "have his cake and eat it too." If done properly, a Chattel Appraisal/Cost Segregation Study is an estate planning home run*.

*Chattel With Us, LLC are not a CPA's or Attorney's. You should always check with your tax and legal advisors.