What should the cpa do

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Point 1: Many taxpayers have "cost-segregated" their buildings. This means that an engineering study is done to determine whether some of a building's cost can be segregated into tangible personal property (generally a 5 year or 7 year MACRS life with accelerated depreciation) rather than real property (a 27.5 year or 39 year MACRS life with straight line depreciation). The faster depreciation for the tangible personal property yields significant tax savings.

Point 2: A CSP is determining the gain or loss from dispositions of an office building. A sale document details the selling price of the land and building. however, the building was cost-segregated and the CPA finds records of cost and related depreciation for the tangible personal property that was part of the cost segregation. No mention of this tangible personal property was made in the sale agreement, but the building and all of its contents were sold.

Question 1: What should the CPA do?

Reference no: EM132479655

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