Owning real estate represents a significant financial investment for any business or investor. When it comes to the tax advantages, are you managing these assets in a way that enhances your return?
Properly classifying your fixed assets and increasing property depreciation are key to sound real estate management—and through the tax deductions and deferrals they generate, they free up cash you can reinvest immediately.
Our tangible asset incentive services include:
A cost segregation study, which separates cost components of a building into their proper asset classifications and recovery periods, allows you to front-load your depreciation deductions into the early years of asset ownership. In doing so, you defer your tax liabilities and increase cash flow in the near term.
Because we combine the expertise of seasoned tax accountants with that of in-house engineering and construction specialists, we can deliver even the most complex cost segregation studies quickly and effectively.
Learn more about cost segregation.
Energy efficiency deductions and credits provide an excellent opportunity for companies to reduce their tax liability. Taxpayers can generally take advantage of a 26 percent federal income tax credit for certain energy property (30 percent from 2016-2019)—predominantly wind and solar equipment—placed in service through 2022, with a gradual phaseout of the credit through 2025 for select energy property. The chart below lays out the credit values that can be applied to each type of energy property in coming years.
The Section 179D deduction for energy-efficient commercial buildings was made permanent, which means it’s not too late to claim these deductions. They’re valued as highly as $1.80 per square foot for property placed in service after January 1, 2006. In the case where the building is owned by a government entity, that government entity may elect to allocate the deduction to the designer or contractor of the project.
Learn more about energy credits and incentives.
Even though fixed assets make up a significant portion of many companies’ balance sheets, managing them can still prove difficult. Capitalizing your fixed assets improperly could put your company at risk of noncompliance—and it could mean you’re missing out on significant potential tax benefits.
By performing a fixed asset tax scrub, we can correct and accelerate deductions on those assets that were capitalized with improper tax lives or methods and generate immediate tax deferrals—plus reduce your exposure in the event of an IRS audit. We provide consultation on your fixed asset management, areas of risk, and opportunities for cash benefits.
Learn more about fixed asset consulting.
The new tangible property regulations, mandatory for tax years 2014 and beyond, have changed the landscape regarding which improvements to tangible property can be expensed and which must be capitalized. The new regulations also introduced a potentially significant benefit: Building owners can now deduct the remaining cost of building components when they are replaced rather than continuing to depreciate them for the remainder of their tax life.
Our professionals are well versed in the new regulations, including identifying components and their individual costs—as well as in case law that supports various tax positions. We can review your real and personal property additions for compliance with the new regulations and identify any additional opportunities to expense assets.
Learn more about tangible property regulations consulting.
In New Mexico, eligible tax-exempt entities—such as those in health care, government, and education—may qualify for a refund of gross receipts tax. The refund is charged through the organization’s contractors and applies to tangible personal property purchased for construction projects. Past and present construction projects, including remodels and additions, are eligible.
Our Tangible Asset Incentive Services team is one of the largest in the West, and our dedicated professionals bring a wide range of expertise to their projects—from the nuances of tax and accounting to engineering, valuation, and construction. We’ve worked with more than 1,200 clients across multiple industries and sizes, from single-leased office tenants to businesses with extensive property portfolios, to help them realize benefits in excess of $500 million.
Taxpayers often overlook tangible asset incentives—resulting in missed tax benefits and reduced cash flow. Find out how to turn tax liability into opportunity by filling out our complimentary benefits estimate request form. A Moss Adams professional will contact you with a preliminary estimate of the potential tax benefit to your organization.
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