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:
• 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
• Approximately $318,000 in savings per property
• Tax Savings of $7+ Million!
Tax Savings of $44,654!