Fixed Asset Studies

Every business is comprised of unique assets. However, many businesses don’t realize that many of their assets are eligible to be reclassified into shorter “tax lives.” A fixed asset study can typically reallocate between 25 percent and 40 percent of a company’s depreciable asset base to shorter tax lives. That means increased depreciation deductions, which can generate an increase in cash flow through current tax savings. For example, a $1 million asset being reclassified from a 39-year life to a five-year one, will generate more than 1,300 percent more depreciation deductions in the first two years.

A fixed asset study evaluates a company’s assets and assigns misclassified fixed assets to appropriate tax lives. While a cost segregation study focuses on buildings, a fixed asset study encompasses all fixed assets a company owns. This results in immediate and substantial cash flow by accelerating deductions on assets that were previously placed in service with improper tax lives.

A proper fixed asset study requires not only tax expertise, but also an understanding of engineering and construction concepts. Our team of qualified experts will visit your locations to inspect and photograph assets, identify their use and function, and review supporting documentation including purchase orders, invoices, and blueprints. Our team then calculates the “catch-up” adjustments using our proprietary software. Our deliverable is a comprehensive report that includes all required documentation per IRS guidelines, including technical memos, supporting case law, detailed asset schedules, and cost records for reclassified property. Our thorough analysis ensures that all assets are accurately classified in order to optimize tax savings.

The best strategy for tax planning is specific your business and personal situation. Your plan must be tailored to fit your unique circumstances. Contact Lanter, Leonardo & Levy for a no obligation consultation on preserving the company and wealth you have worked so hard to achieve.

Call Alex Leonardo or Rick Captain today at 561-998-7770

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