Tangible Property Regulation Review

A Tangible Property Regulation Review reviews a taxpayer’s entire depreciation schedule to ensure the treatment of all assets. The changes and opportunities from these reviews result in accelerate deductions that improve cash flow in the year of change. Our most capital-intensive clients elect this process since it reviews all assets for a multitude of opportunities, including:

Individual Asset Review – Review Assigned tax lives to expenditures reclassified as assets based on Rev Proc 87-56. Assets are often inappropriately depreciated, such as process-related plumbing, electrical, and ventilation systems. STG will identify assets qualifying for accelerated depreciation.

Capital to Expense Studies – The Tangible Property Regulations (TPR) allow taxpayers to retroactively review expenditures that were capitalized but qualify as repair and maintenance expenses, such as replacing roof membranes, resealing parking lots, and replacing of HVAC components.

Retirement Studies – STG will review the depreciation schedules for ‘ghost assets’ that remain as active fixed assets. These are assets that have since been removed such as disposed roofs and HVAC components. Taxpayers are allowed to immediately deduct the remaining undepreciated basis.

Partial Dispositions – The TPRs now allow taxpayers who make improvements to their facilities to immediately deduct the cost of the removed building components and to instantly write-off undepreciated basis amounts.

Demolition Costs – Demolition costs for building improvements are often capitalized with the cost of a new asset but can now be immediately deducted under the new TPRs

Bonus Depreciation – Bonus depreciation allows taxpayers to immediately write off from 30% to 100% of the purchase price of a new or USED asset, but is often overlooked. This study identifies missed bonus opportunities.

Cost Segregation – Commercial buildings are depreciated over 39 or 27.5 years. A cost segregation study carves out components from buildings that qualify for more rapid depreciation, such as land improvements and personal property. 

Contact STG today for a complimentary consultation to discuss your TPR Compliance, and to identify and claim your missed deductions.

For more information about our Tangible Property & Repair Reviews: