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New Tax Law Immediate Write-Off Increases Demand For Tax Savvy Engineers

New Tax Law Immediate Write-Off Increases Demand For Tax Savvy Engineers

One thing that troubles me about these discussions is that the implication is that cost segregation is some sort of election.  In principle, if there is all sorts of five-year property mixed in with your building, you really should break it out to file an accurate return.  Also, in principle, the Cohan rule should apply, if you are too thrifty to hire an engineer.

I discussed the application of the Cohan rule (Named for the famous Broadway producer who was too much of a yankee-doodle dandy to keep track of his receipts) with Mr. Bagne. One of the things he admitted was that if somebody was knocking out multiple copies of the same sort of building, they should be entitled to a pretty deep discount on subsequent studies after the first one.  Applying that logic I could see some developers taking the function in-house, although I suspect it might not be worth the trouble.

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Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.