Accelerated asset depreciation * Fixed asset depreciation * Straight line depreciation * Commercial real estate company

Accelerated depreciation, how can it save me money?

Accelerated asset depreciation is vastly different than straight line depreciation as it relates to the fixed asset depreciation schedule for your company owned commercial real estate. CPC specializes in MACRS compliant “cost seg”, otherwise referred to as a cost segregation study.

Currently, your CPA is not using the accelerated asset depreciation method to categorize your fixed asset depreciation. Using the straight line depreciation method is the widely used method because it is simple. Our company uses an engineering based cost segregation (cost seg) study to re-categorize the assets of your commercial real estate. Integrating MACRS into our cost segregation study guarantees the IRS will accept the accelerated depreciation. The IRS also requires that depreciation be supported by an engineering based study, which is why most CPA firms cannot offer this type of depreciation. Without an engineering study, a CPA can only submit a straight line depreciation schedule.

With the enactment of MACRS through the Tax Reform Act of 1986, this is now the depreciation method accepted by the IRS. As a result of this change, property classes were expanded and more depreciation could be taken sooner on certain company owned commercial real estate assets. So, thru a cost segregation study (cost seg), accelerated depreciation could be realized on certain assets and the accelerated asset depreciation could be outlined in the fixed asset depreciation schedule.

As a result of changing from straight line depreciation to an accelerated depreciation, your company will see immediate tax benefits thru a lower tax liability. Having your fixed asset depreciation changed to accelerated asset depreciation, thru a MACRS compliant cost segregation study (cost seg), your company will be afforded a lower tax liability on your commercial real estate.