Maximizing Depreciation: Cost Segregation, QIP, Bonus Depreciation, Filing Refund Claims

Cost segregation can be used to generate federal and state income tax refunds by deferring depreciation on business asset purchases. Evaluating depreciable lives and separating assets into component pieces can provide immediate cash refunds for companies. Nonresidential real property is depreciated over 39 years and residential rental property is depreciated over 27.5. To the degree portions can be expensed or the depreciable lives shortened, taxpayers can adjust these lives and file refund claims.

Before considering a cost segregation study, business advisers need to understand the latest depreciation developments. Among these, the CARES Act authorized a 15-year life for QIP which also makes it eligible for bonus depreciation. For 2022 bonus depreciation remains at 100 percent but will be reduced to 80 percent in 2023. In addition to understanding the benefits of cost segregation and the intricacies of current depreciation rules, practitioners need to know how to properly claim the benefits of cost segregation studies and depreciation adjustments.

Listen as Lester Cook, CCSP, Principal at KBKG, explains techniques for maximizing depreciation, cost segregation studies, and claiming additional deductions that are unearthed.

1. Depreciation update
   1. Refresher
   2. QIP and the CARES Act
   3. Bonus depreciation
2. Net operating losses
3. Cost segregation
   1. Advantages
   2. Operation
   3. Claiming the benefits

The panelist will cover these and other critical issues:

• Changes to QIP under the CARES Act
• Clients who are ideal candidates for cost segregation studies
• Claiming benefits of depreciation changes
• Property components with often overlooked shorter lives

Learning Objectives

After completing this course, you will be able to:

• Identify changes made to depreciation under the CARES Act
• Determine taxpayers who can benefit from cost segregation studies
• Decide appropriate lives for QIP after the CARES Act
• Ascertain how to file refund claims for depreciation adjustments

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and their respective partners and shareholders.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).