Retirement Studies

Election Options and Tax Impact
As taxpayers are evaluating various election options, a key factor in such decisions is determination of the remaining tax basis of partial or total UOP dispositions. Our third party engineering-based valuation expertise is designed to:

  • Identify often unknown and unreported UoP dispositions
  • Measure quantities and extent of the identified and disposed UoP components
  • Conduct retrospective appraisals to determine relative fair market value of acquired components
  • Apply TPR (Tangible Property Regulations) designated and approved valuation methodology to reallocate the original basis
  • Determine accumulated depreciation through disposal date, and determine the current NBV tax basis for write off
  • Create detailed work papers and IRS audit documentation

Units of Property (UOP) Partial Disposition
Recently IRS issued tangible personal property regulations provides guidance for making accounting method changes regarding acquisition costs, repair and maintenance expenditures, and partial dispositions of Units of Property.

Retirement Studies for Renovations

Renovation generally involves removal of existing building components such as ceilings, floor finishes, light fixtures, ductwork, walls, wiring, plumbing, etc. The remaining tax basis can be written off.

This write off reduces income taxes as shown below, plus property taxes and property insurance coverage:

WITHOUT WRITE OFF WITH WRITE OFF
Taxable Income $3,000,000 $3,000,000
Renovation Writeoff $0.00

(1,000,000)

Net Taxable Income $3,000,000 $2,000,000
Fed & State Income Tax 42% $1,260,000 $840,000
Tax Savings $0.00 $420,000