Engineering and Construction Glossary

Documents and quantities

Takeoff — measuring quantities from drawings or from a site inspection. A takeoff counts fixtures, lineal feet of conduit, square feet of flooring, or tons of steel. The quantity is an input to a cost. It is not a Whiteco factor. A correct count of lighting fixtures still leaves open whether those fixtures are general building lighting or decorative lighting.

As-built — drawings that record what was constructed, as opposed to the design set. Publication 5653 lists as-builts among the documents a quality study of new construction should use. Design drawings show intent. As-builts show the panel that was actually hung and the wall that was actually moved. When they conflict, the inspection and the as-built are the better evidence of function and permanence.

Pay application — a contractor invoice, often grouped by CSI division, that may bundle several tax classes on one line. AIA-style G702 and G703 continuation sheets are the records Publication 5653 tells examiners to compare to a study. A Division 26 line labeled “electrical” can include house panels, equipment feeds, and lighting. The study’s job is to unbundle that line with other evidence, not to accept the heading as a class.

CSI division — a construction specification heading (for example Division 26 Electrical). It is a filing system, not a class life. Publication 5653 even includes a case table organized by MasterFormat division so examiners can find opinions that mentioned similar work. That table is a finding aid. It does not make Division 09 floor covering five-year property.

Panel directory — a label schedule on an electrical panel that can support a functional split between house loads and equipment loads. Scott Paper-style allocation needs a factual basis for what the feeders serve. A directory, a one-line diagram, and a load study are engineering evidence for that split. They do not replace the legal test.

Specifications — the written quality and product requirements that accompany drawings. Specs can show whether floor covering was specified as strippable or permanently adhered, whether a partition was specified as relocatable, or whether an HVAC unit was specified solely for a process room. They are evidence of intended function. They are not Treas. Reg. §1.48-1.

Cost

Unit cost — a published or contractor price per measured unit (square foot, lineal foot, fixture). In a detailed-cost study the unit cost often comes from the contractor’s own schedule of values. In an estimate study it may come from a cited manual page. Publication 5653 expects the citation (volume, page, item) and consistent technique across the job. Mixing a high manual price for short-lived items with a low residual for the building is the skew the guide warns about.

RCNLD — replacement cost new less depreciation; an estimating method that prices today’s reconstruction and then reduces for age and condition. The Audit Techniques Guide discusses this approach for used property and says replacement cost new less depreciation of the improvements should approximate purchase price less land fair market value. It is a reconciliation check, not a license to force a percentage step-up. The guide states that applying a pro-rata step-up factor to estimates to match a purchase price is not an acceptable method.

Reconciliation — showing that component costs add to depreciable basis after land is removed. A quality study reconciles to actual project cost or to a supportable allocation of purchase price. Indirect costs — architect fees, permits, general conditions, interest during construction when capitalized — are allocated across components rather than dumped into the building or omitted. Double-counting furniture that was purchased separately from the building is a reconciliation error the guide flags.

Cost manual — a commercially published unit-cost book. The Audit Techniques Guide discusses using cited, consistently applied manuals and names examples of published sources. This library does not treat any named manual as tax law. Manuals sit in Tier 3 of the research methodology: useful for describing how an estimator prices a system, never as authority for a recovery period.

Indirect cost — a project cost that is not a single installed component. General conditions, supervision, temporary facilities, and design fees are typical. The study’s engineering task is to spread those costs in a stated, consistent way. The tax task remains the class of the component they attach to.

Construction words that are easy to confuse with tax words

Structural — in construction speech, the load-bearing frame. In Treas. Reg. §1.48-1(e)(2), “structural component” is a broader tax list that includes central HVAC, plumbing, and wiring. A non-bearing partition can still be a structural component for tax purposes. A decorative soffit is not structural in the engineering sense and still needs a Whiteco analysis for tax.

Fixture — in construction and local property law, personal property that has been attached to realty. Treas. Reg. §1.48-1 says local fixture law is not controlling. An item can be a fixture under state law and still be tangible personal property for MACRS, or the reverse.

Building system — in the tangible-property regulations, HVAC, plumbing, electrical, elevators, escalators, fire protection, security, and gas distribution are separate units of property for repair analysis. In a cost-segregation report, “system” is often just a grouping heading. Do not import the capitalization unit into the recovery-period column.

Permanent — in construction, designed to last the life of the building. In Whiteco, permanence is a six-factor inquiry that includes intended duration, removability, and damage. A five-year leasehold finish can fail the construction meaning of permanent and still be a structural component if it is a listed building part relating to operation or maintenance.