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/Partial Dispositions –Taxpayers often have ‘ghost assets’ in their fixed asset systems, such as removed roofs and HVAC components or tenant improvements. A retirement study identifies these assets, allowing taxpayers to immediately deduct the remaining undepreciated basis.
- §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.
HOW WE HELP HAWAIIAN TAXPAYERS
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.