Fixed Asset Depreciation Review

A fixed asset review evaluates a company’s federal tax depreciation schedule over the last 20 years and assigns the appropriate tax lives to misclassified assets. While a Cost Segregation Study focuses on buildings, a Fixed Asset Review encompasses all fixed assets a company owns, including real property, machinery, furniture, fixtures, and equipment. Misclassifications are generally caused due to changes to case law, use of “book” lives for tax purposes, or the in-depth knowledge necessary to determine correct lives.

Benefits

The result of a KBKG Fixed Asset Review is immediate and substantial cash flow by way of accelerating deductions on assets that were previously placed in service with longer tax lives. Other benefits include accurate reporting of book-tax differences and accurate tax filings.

Who makes a good candidate?

Taxpayers utilizing the “book” method of accounting for tax purposes should consider the potential to accelerate cash flow by changing their method of accounting and engaging in a Fixed Asset Review. While many can take advantage of deductions through a Fixed Asset Study, industries that stand to benefit the most retail, hotels, restaurants, supermarkets, manufacturing, and banking among others.

The process

Under Rev. Proc. 2009-39, the change in accounting method of reclassifying previously capitalized assets is considered automatic. In order to implement the automatic method, a section 481(a) adjustment is needed, along with specific representations in an attachment to Form 3115. This change in accounting method can be filed any time before the extended tax return due date in the year of change.
A proper Fixed Asset Study requires not only tax expertise, but also an understanding of engineering and construction concepts. KBKG’s team of qualified engineers visit client locations to inspect 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.
We understand that your time is valuable and that any disruption to your day-to-day responsibilities is cost to your business. KBKG’s approach to our comprehensive Fixed Asset Review is to do as much of the legwork as possible to minimize and time needed by your staff.

Get started today

Our deliverable is a comprehensive report that includes all required documentation per IRS guidelines including technical memos, supporting case law, detailed schedules of assets, and cost records for reclassified property. KBKG’s thorough analysis ensures that all assets are accurately classified in order to optimize tax savings.To get started today,contact Gian Pazzia at 877.525.4462 x150 or gian@kbkg.com