The management of fixed assets today entails more challenges than ever before. The complexity of calculating depreciation, coupled with tax law changes, merger and acquisition activity, and antiquated ERP systems has increased the need for companies to have a clear strategy around the management of fixed asset tax reporting.
Kris Miller and Nina O'Connor discuss how companies that get involved on the front end of a project are significantly better positioned to maximize the tax benefits.
PwC offers a suite of fixed asset tax services to help your company improve its fixed asset tax strategy and compliance, and achieve a more accurate and sustainable tax position. These services include:
Fixed Asset Income Review
Many companies misclassify fixed assets for tax purposes, resulting in missed or delayed depreciation deductions, or improperly depreciated fixed assets. We can help by performing a fixed asset income review to ensure that the asset class and recovery period over which fixed assets are being depreciated is appropriate, and that any missed depreciation deductions are identified.
Current capitalization, repairs, and dispositions policies may no longer be appropriate for federal income tax purposes, given the recently issued repairs regulations under IRC Section 263(a). We can perform an analysis of your current repairs opportunities and help you in your transition to being compliant.
Cost Segregation Study
Companies purchasing or constructing new facilities, or renovating existing facilities, often misclassify the fixed assets involved in these projects, delaying or missing out on depreciation deductions. We can help by performing a cost segregation study to identify building components and systems that should be reclassified.
Energy Efficient Commercial Building Deductions
Companies that are “going green” may undertake various energy efficiency projects without considering the tax benefits. We can help you understand the tax incentives available for qualifying new construction, leasehold improvements, or retrofits, and which assets qualify as energy-efficient property. We can also assist with the certification requirements and calculating the energy efficiencies for purposes of claiming the deduction.
Tax Depreciation Services
Many companies that are capital-intensive continue to be concerned about the reliability of their fixed asset depreciation and gain/loss calculations. Our co-sourced depreciation calculation and reporting service can assist your company with the challenges of calculating depreciation.
Like-Kind Exchange Services
Companies that routinely acquire and dispose of assets typically recognize substantial income tax gains when they dispose of their property. It might be possible to defer the income tax liability associated with these gains by implementing a Section 1031 like-kind exchange (LKE). We can help your company with like-kind exchange strategies, including the implementation of a Like-Kind Exchange Program for companies involved in recurring exchanges.