Tax Specialty Services

Tax Specialty Services2018-11-12T15:40:39+00:00

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Straight Talk

Translating technical jargon into a plain English “text.”
We are constructing a building addition for our automotive plant. Are there potentially any tax savings ideas related to this construction?
CFO
As a matter of fact, there is a process called “cost segregation” that can often yield dramatic tax benefits. It is basically a process where the cost of a building is segregated by components, some of which can be depreciated much more quickly than the building shell. That updated depreciation schedule can reduce your current tax bill significantly.
CRI
That sounds great, especially since the depreciation period for a building is so lengthy. That actually gives me an idea. We added a second building a few years ago; is it possible to use this strategy for our previous construction? Is it possible to do a cost segregation study that long after construction?
CFO
Absolutely! We will be glad to talk with you about both your current and previous construction to advise you on the alternatives and develop the most advantageous tax plan.
CRI
Saving current taxes is always a great idea. I will give you a call this afternoon!
CFO

Solutions Simplified

Down-to-earth descriptions of our services.

Cost Segregation Studies

Cost segregation goes far beyond the identification of furniture, fixtures, and equipment (FF&E). It is a strategic analysis that identifies, segregates, and reclassifies property costs currently being depreciated over a longer term (such as 39 years) to shorter depreciable periods. This process allows businesses to take advantage of tax deductions that they would normally wait years to receive – thus, minimizing tax liability, liberating cash flows, and allowing for further investments in the business. Additionally, a taxpayer can utilize a properly prepared cost segregation study and reflect the tax benefits on a current return without amending prior year returns.

Tangible Property

In 2013, the IRS released final tangible property regulations that require the capitalization of amounts paid to acquire, produce, or improve tangible property, while allowing amounts for incidental repairs and maintenance of property to be deducted. Plus, the regulations explain how to distinguish between capital expenditures and deductible business expenses. They are generally applicable to tax years beginning on or after January 1, 2014, and impact all businesses that own or lease tangible property—including buildings, machinery, vehicles, furniture and equipment.
The IRS threshold allows businesses to expense up to $2,500 per item, and businesses that conduct a financial statement audit can continue to utilize the higher $5,000 de minimis safe harbor amount.

Tax Credits & Incentives

The government is utilizing tax credits and incentives at both the Federal and state levels to encourage investments and conservation and to stimulate economic development. From general to industry-specific tax incentives, your CPA firm’s depth of knowledge – and ability to assess the tax implications of your potential future plans – is instrumental to the minimization of your taxes. Plus, since the taxpayer bears the burden of proof, the documentation of your tax credit qualifications is imperative. Our process will assist you in evaluating, identifying, and potentially qualifying for applicable tax credits and incentives.

Tax Due Diligence

During the tax due diligence process, the CRI team reviews historic tax profiles and filing histories to assess risks and opportunities. We are also available to evaluate acquisition structures and comment on the purchase agreement—plus executive compensation agreements, if needed. CRI can also review and evaluate potential tax credits and incentives that might be beneficial post-deal.