Solving fixed asset and tax accounting challenges to unlock hidden value
Equalys Tax Services, LLC is a specialty firm providing solutions to efficiently and accurately calculate tax depreciation and the preparation of accompanying tax forms and reports. We also specialize in cost segregation studies and all issues related to identifying and supporting the proper depreciation recovery period for all assets supporting accelerated depreciation deductions, tax credit calculations, REIT asset tests, etc., as well as general tax accounting matters.
Equalys' staff has been delivering high value results to clients for over 15 years. Cumulatively we have analyzed billions of dollars of costs and saved taxpayers hundreds of millions of dollars.
We strive to provide you with exceptional service that will last for years to come.
Get in touch with us to set up a consultation, or use the contact form at the bottom of this page to inquire whether our services are right for you.
PO Box 212
Newington, VA 22122
Areas of Practice
Taxpayers often depreciate the cost or basis of machinery or equipment over too long a life. A common example is when electrical wiring or plumbing dedicated to and necessary for manufacturing equipment is depreciated over the 39-year life of the associated building instead of the 5-year life of the manufacturing equipment. Equalys can help you segregate the cost of short-lived machinery and equipment from long-lived land improvements, buildings, land and other assets.
We have the expertise and knowledge to identify costs that can be segregated, compute catch-up Section 481(a) adjustments and file required paperwork with the IRS (generally a Form 3115, Change in Accounting Method) to effectuate the change and realize the benefit for federal income tax purposes. We also have extensive experience defending our positions on IRS Exam where we have sustained over 90% of our positions.
Whether you are looking at new construction or an existing facility, we can help accelerate depreciation deductions by performing a cost segregation study and providing you IRS audit-ready documentation.
A threshold issue to determine depreciation expense is whether a taxpayer is entitled to depreciate the cost of the asset at all. If the taxpayer is determined to be the tax owner of the asset they can claim a depreciation expense. If not, then claiming a depreciation expense is not appropriate.
This issue is very common and commonly overlooked when a taxpayer leases or rents an asset as well as when a taxpayer makes a payment to improve property owned by another party.
Asset classification for Tax credits, real estate investment trusts (REITs) and other purposes
Numerous calculations for Federal income tax purposes are dependent of the proper classification of the cost of an asset. For example, a tax credit may be dependent on the qualifying cost of tangible personal property as may the status of a company as a Real Estate Investment Trust (REIT).
Equalys can help you determine the proper asset classification to support tax credits, REIT asset tests and various other Federal income tests or positions. The support for these positions often includes a written memo documenting the proper classification as well as a schedule of allocated costs.
Capitalization vs. Expensing (Tangible Property Regulations or Repairs)
Taxpayers are often faced with the question of whether to capitalize and depreciate an expenditure or to currently expense it. This issue has a very long history and was most recently highlighted with the issuance of the Tangible Property Regulations (TPR) or Repairs Regulations in 2013.
Equalys can help you with capitalization vs. expensing issues and document positions with memos and associated cost allocation schedules.
If you are faced with capitalizing a large expenditure or routine expenditures that are cumulatively significant, we are here to help.
Many tax departments struggle with the complexity of computing tax depreciation calculations and preparing associated reports. Sources of complexity include assets transferred in M&A activity, ghost assets, differences in financial accounting and tax accounting fixed asset lists, gathering data, and computing depreciation for multiple purposes (e.g., calculations for Federal, AMT, E&P, and / or state purposes). In addition, tax department staff often have limited time and fixed asset specific expertise. The result is that tax depreciation calculations are often less than optimal and often consume a significant amount of resources.
Equalys’ Depreciation Calculations is a tool that combines tax and technology expertise to make these calculations more accurate and efficient. The impact of this is that the accuracy of tax depreciation calculations are improved (often accelerating deductions and reducing cash taxes) with significantly reduced costs.
Depreciation Calculations is capable of preparing all required forms, reports and schedules that you may need.
Companies often have tremendous hidden value locked away in timing items. We can assist with identifying optimal accounting methods and navigating IRS change in accounting method requirements to unlock this value.
What will you do today to achieve your goals tomorrow?
Use the form below to learn more about Equalys Tax Services, LLC or to contact us regarding your inquiry. Please be as detailed as possible. Include your industry along with any relevant background information. To help us best serve you, please first describe the issue you’re having before telling us what you want to achieve. You may also email or call us to make an appointment for a free consultation.
For job opportunities, please email us your resume. We’re always looking for new and exceptional talent to lead the firm into uncharted fields of practice.