Glossary

Capital expenditures , commonly known as CapEx , represent the money a business invests in acquiring, upgrading, or maintaining physical assets like buildings, equipment, vehicles, and technology. Unlike day-to-day operating expenses that keep the lights on, CapEx investments are strategic moves that shape a company's future capacity and competitive position. These expenditures appear as assets on the company's balance sheet and are gradually expensed over time through deprec

Cost segregation studies often come packed with complex terminology pulled from tax law, engineering, and construction. For property owners, investors, and even many tax professionals, these terms can seem like a different language altogether. However, grasping these concepts is crucial for understanding a study’s results and applying them accurately on a tax return. Glossary of Cost Segregation Terms Below is a list of easy-to-understand definitions of common technical terms

Leasehold improvements represent a significant investment for businesses that are leasing commercial spaces. It's essential to grasp their depreciation life for effective tax planning and to make the most of your deductions. This guide explains what leasehold improvements are, how their depreciation life is determined, and why proper classification matters for your business. TLDR Leasehold improvements depreciation life varies by type and IRS classification. Qualified leaseho

The "Big 4" refers to the four largest global accounting and professional services firms that really lead the pack. These companies have...

When it comes to investing in real estate and crafting a solid tax strategy, cost segregation stands out as one of the most effective ways to boost your depreciation deductions. However, there’s a key aspect that often catches people off guard: land value isn’t included in these calculations. Grasping how the IRS views land and knowing how to properly divide the value between land and building components is crucial for conducting accurate, audit-ready cost segregation studies

When it comes to managing properties or equipment, maintenance is just part of the deal. However, not all maintenance needs to be capitalized, thanks to the Routine Maintenance Safe Harbor  rule. With this rule the IRS allows you to deduct certain recurring costs right away instead of spreading them out over time. This safe harbor is a tax strategy that often flies under the radar, but it can really streamline your accounting if you use it wisely. Let's get into the nitty-gri

Real estate owners and investors are always looking for ways to optimize depreciation and improve after-tax cash flow. One strategy that...

When it comes to getting the most out of your tax deductions in real estate, every little detail counts. One often-missed but incredibly...

When you invest in real estate, understanding how your assets depreciate isn’t just an accounting formality... it’s a crucial strategy for managing your taxable income and boosting your cash flow. One of the simplest ways to depreciate rental properties is through a method known as straight line depreciation . In this article, we’ll guide you through what straight line depreciation is, how to calculate it, and how it stacks up against other depreciation methods in the world

Are your rental properties costing you money on paper while the IRS keeps a tight grip on your deductions? Whether you're managing...

The Research & Development (R&D) Tax Credit is a federal tax incentive that lets businesses lower their tax bills dollar-for-dollar for...

When it comes to real estate and asset management, accurately classifying property types is crucial for compliance and taxation.

Qualified Improvement Property (QIP) is an important tax category that affects how businesses handle the depreciation of certain...

A depreciation schedule is a comprehensive accounting record that monitors the gradual decline in value of an asset throughout its useful life. For real estate investors, these schedules serve as valuable tax tools, enabling you to deduct the cost of income-generating properties over time, which can significantly lower your taxable income without impacting your cash flow. Depreciation Basics Depreciation refers to the wear and tear, deterioration, or obsolescence of propert

I've put together a detailed guide that covers 1031 exchanges and how they can be effectively paired with cost segregation . Let me...

What is Form 3115? Businesses need IRS approval to change their accounting methods to ensure consistency and fairness in tax reporting....

The 45L Energy Tax Credit is a federal incentive designed to promote energy-efficient residential construction.

Meet Sharron, a thriving business owner who recently made the decision to sell off two significant assets from her manufacturing company:...

IRS Publication 946, "How to Depreciate Property," is a comprehensive tax document that explains how businesses and individuals can...

The 179D tax deduction, also known as the Energy-Efficient Commercial Buildings Deduction , is a section of the tax code designed to incentivize energy efficiency in commercial properties. Enacted as part of the Energy Policy Act of 2005 , 179D allows building owners and designers to claim a tax deduction for implementing qualifying energy-efficient improvements in commercial buildings. Fundamentals of 179D Energy Efficiency Focus : The deduction applies to improvements made