Accelerated cost recovery for purchased or inherited real property lowers current tax obligations. By appropriately categorizing property into shorter tax lives, Adams Capital’s accelerated cost recovery services maximizes cash flow by deferring income tax payable to future years. Adams Capital classifies the costs incurred for newly constructed or purchased facilities according to the Modified Accelerated Cost Recovery System (“MACRS”) for federal income tax purposes. For inherited property, we assist in determining tax basis and then classify tax basis according to MACRS.
Adams Capital accelerated cost recovery projects are structured to provide a clear and detailed audit trail. From construction drawings and on-site measurements, we estimate quantity and costs for each building component and land improvement. The property items are categorized according to MACRS classifications and the category costs are then allocated to the total costs of construction or purchase price. Available construction drawings are marked to assist in the identification of components described in the report and to provide substantiation and documentation for the recommended classifications.
Adams Capital has significant experience in performing cost segregation projects to maximize cash flow. Contact Adams Capital for more information on accelerated cost recovery.