DEPRECIATION METHOD ELECTIONS
How to Decrease Your Taxes Through Elections

The current political environment with the impending presidential elections reminded us of the fact that elections can make an immediate impact on your profitability. We're not talking about voting for our next commander-in-chief but rather some uncommon elections the IRS allows you to make to decrease your taxes.  

Our discussions with clients have addressed concerns over how to more effectively utilize their depreciation based on current and anticipated future cash flows. This is occasionally an issue with a retroactive cost segregation study because they typically provide a one-time depreciation adjustment which may be too large for the taxpayer to use in the current tax year. While the taxpayer can typically carry the loss forward for Federal purposes, they may not be able to for state purposes based on the laws of the specific states. This concern has also arisen with newly constructed properties (i.e. an office building not yet fully occupied) that may not have enough income to use the excess depreciation created by a cost segregation study.