The first income tax return was for the year ended 1913. Under the "General Deductions" section of this 4-page form, taxpayers were allowed to write-off the "Amount representing a reasonable allowance for the exhaustion, wear and tear of property arising out of its use or employment in the business . . . " - ie, the first time Depreciation was defined by the tax authorities. What started as a relatively simple idea has grown into a lengthy, confusing and ever-changing set of rules, often leading to asset misclassifications in most companies' accounting records.
A Fixed Asset Review and Analysis evaluates a company’s tax depreciation schedules for misclassified assets and makes the necessary changes to the currently-acceptable treatment and rulings. Our Fixed Asset Reviews focus on all of the fixed assets a company owns, including real property, machinery, furniture, and leasehold improvements. Our nationally recognized team of tax professionals keeps in tune with the changing tax code and will provide a free analysis as to the potential impact our review can have on your tax liabilities and the cash flow for your business.
The typical result of one of our Fixed Asset Reviews is an immediate and substantial increase in cash flow thanks to accelerated deductions on assets that were previously placed in service with longer tax lives. While any area of real estate can take advantage of deductions through a Fixed Asset Review, industries that stand to benefit the most include gas stations & convenience stores, nursing homes, retail, restaurants and supermarkets.
The results of our Fixed Asset Review is a comprehensive analysis that includes all required IRS documentation per guidelines including technical memos, supporting case law, detailed schedules of assets, and cost records for reclassified property. MS Consultants' thorough analysis ensures that all assets are accurately classified in order to optimize tax savings. We even prepare and sign the required Form 3115 "Change in Accounting Method" which allows taxpayers to deduct the overlooked depreciation all in the current year.
If you’d like to get a better idea of what we can do to help you realize the greatest tax benefits from your fixed assets, contact one of our consultants today.