Your cash flow opportunities exist now, don’t wait until after tax reform

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Agile strategies in a time of uncertainty

Act now to take advantage of the opportunities that tax reform will present.

Consider options to accelerate deductions and defer income to improve cash flow. At the same time, seek to maximize the value of deductions and minimize the cost of income inclusions in light of proposed tax rate reductions associated with comprehensive tax reform.

How can a strategy help you to be proactive about tax reform?

PwC helps companies define a strategy to optimize (or mitigate risk around) tax positions around the timing of deductions and recognition of revenue.  This perspective is particularly valuable when considering the tax implications to companies as a result of tax reform, and will help you assess:

  • How can I accelerate tax deductions into a period with higher tax rates, achieving permanent tax savings?
  • What are the options to defer income into a period with lower tax rates, achieving permanent tax savings?
  • What is the interplay of the above with pending GAAP accounting changes around revenue recognition and leasing standards? 

How PwC can help you take action

PwC’s specialists can help companies implement their tax policy goals of improved cash flow and tax rate arbitrage through the following interrelated and tailorable service offerings:

  • Analyze timing of income and deductions, as well as cost capitalization, and evaluate the ability to utilize, change to, or adopt advantageous tax accounting methods.
  • Identify previously capitalized expenditures that may be deductible as repairs and maintenance.
  • Increase the value of current tax depreciation deductions associated with newly acquired or constructed fixed assets by verifying that they are included in the proper asset class through a cost segregation study.
  • Review fixed assets ledgers to reclassify long-lived assets to shorter recovery periods.
  • Determine if previously capitalized transaction costs could be recovered if a subsequent transaction is entered into.
  • Revisit your inventory and/or interest capitalization calculations to potentially capitalize less costs.
  • Determine whether it may make sense to acquire new assets sooner in order to take advantage of depreciation deductions at higher tax rates and defer gains on sales of old assets until later in order to recognize them at lower tax rates.

Contact us

Pam Olson
US Deputy Tax Leader and Washington National Tax Services Leader, PwC US
Tel: +1 (202) 414 1401
Email

Rohit Kumar
Leader, WNTS Tax Policy Services, PwC US
Tel: +1 (202) 414 1421
Email

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