A Comprehensive Fixed Asset Review is a powerful tax planning strategy that evaluates a taxpayer’s entire depreciation schedule to find a multitude of opportunities to accelerate deductions and vastly improve cash flow. While this strategy includes reviewing assets for missed cost segregation studies, for taxpayers with numerous assets, this is a vastly superior planning idea since it reviews all assets for a multitude of opportunities, including:
- Cost Segregation – Commercial buildings are depreciated slowly over 39 years. A cost segregation study carves out components from buildings that qualify for more rapid depreciation, such as land improvements and personal property. Click here to visit our cost segregation page.
- Individual Asset Review – Individual assets are often inappropriately depreciated as part of a building, such as process-related plumbing, electrical, and ventilation systems. This study identifies assets qualifying for more rapid depreciation.
- Capital to Expense Studies – The new TPRs allow taxpayers to retroactively review expenditures that were capitalized but qualify as repair and maintenance expenses, such as replacing roof membranes, resealing parking lots, and replacing of HVAC components.
- Retirement Studies – Taxpayers often have ‘ghost assets’ in their fixed asset systems, such as removed roofs and HVAC components. A retirement study identifies these assets, allowing taxpayers to immediately deduct the remaining undepreciated basis.
- Partial Dispositions – The TPRs now allow taxpayers who make improvements to their facilities to immediately deduct the cost of the removed building components and to instantly write-off undepreciated basis amounts.
- §179D Energy Efficient Commercial Building Deduction – Taxpayers who construct new buildings or make improvements to existing ones can take an immediate deduction of up to $1.80/SF for investments in efficient lighting systems, HVAC and hot water systems, and the building envelope. Click here to visit our §179D page.
- §45L Energy Efficient Home Credit –allows eligible developers to claim a $2,000 tax credit for each newly constructed or substantially reconstructed qualifying residence, which includes single family homes, apartments, condominiums, and student housing. Click here to visit our §45L page.
- Demolition Costs – Demolition costs for building improvements are often capitalized with the cost of a new asset but can now be immediately deducted under the new TPRs
- Bonus Depreciation – Bonus depreciation allows taxpayers to immediately write off from 30% to 100% of the purchase price of a new asset, but is often missed. This study identifies missed bonus opportunities.
- Intangible Asset Review – Taxpayers often have intangible asset on their fixed asset records that are amortized incorrectly or can be removed, such as an expired non-compete agreement. This study reviews intangibles for opportunities to accelerate amortization.
HOW WE CAN HELP
Our team of specialists is highly experienced in performing Comprehensive Fixed Asset Reviews and have done so for both small businesses as well as Fortune 500 companies. Our proprietary software can upload assets from any depreciation system, quickly review asset depreciable lives, methods and conventions using automated analysis tools, and identify potential opportunities. Our software has a power depreciation system that compares how depreciation is currently calculated to our preliminary analysis and calculated the additional deduction and additional cash for the current year, the net present value of benefits, and the §481(a) adjustment used on the Form 3115, Application for Change in Accounting Method. We do this preliminary analysis completely free with no obligation.
If engaged to perform the study, we will perform necessary site visits, review construction documents, conduct interviews, analyze invoices, and do all necessary steps to confirm and document our positions on identified opportunities. We can draft necessary Form 3115s and with our proprietary software, assist in making changes in the fixed asset system. If the study is audited, we provide free audit support.
Our fixed asset analysis technology was designed in-house and is exclusive to ICS Tax. It has been used to complete hundreds of successful projects for manufacturers, financial institutions, telecommunication companies, retailers, property investors and numerous other taxpayers operating in a wide variety of industries. Click below to view sample reports from of our proprietary software: