Capital to Expense Reversal

 

Capital to Expense Reversal is the ability to look-back at items which may have been capitalized (longer depreciation, i.e. 5, 7 or 15 years) since you owned the building and expense them in the current tax year. Under the new Tangible Property regulations, would these expenditures have to be capitalized or could they be expensed? This creates economic opportunities, read = Cash Flow! Let us calculate and implement this for you.

Some examples of CapEx Reversal:

Apartment Complex
• Purchased in 1993 for $1.1 million
• Improvements over the years: $4 million, $160k, $2.7 million, $70k, $26K, $900k
Tax Savings of $554,000

Office Building Converted to Hotel
• Purchased in 2000 for $1.6 million
• Multiple Improvements: $10 million, $1.2 million, $41K, $30K
Tax Savings of $1.1 Million

22-Property Portfolio
• Approximately $318,000 in savings per property
Tax Savings of $7+ Million!

Self-Storage Example
Tax Savings of $44,654!