If MACRS property that is subject to the half-year or mid-quarter convention is purchased and then disposed of in the same tax year, no MACRS deduction is allowable (i.e. section 179/168(k)).  Basically, you can’t dispose of an asset with in the same year that you placed that asset in service if you elected to take the bonus depreciation.  Not to be confused however, with an early disposition.  An early disposition is simply when you dispose of an asset before it’s estimated useful life is over.

Why would someone think or want to dispose of an asset in the same year?  Many reasons: say you purchased a group of computers on Craig’s List or eBay and they didn’t come with a warranty? Then you got them placed them in service and elect to take the 50% deduction in the first year, and then — wha wha whaaaaa… they all break or blow up (you know what I’m talking about). You can’t replace them for free… 

If you have trouble managing your asset dispositions or even calculating the bonus depreciation for tax calculations, Sage FAS is a glorious mechanism and can automate these process and even include (I hope you are sitting down) all the necessary reports for you and your Auditors!  Get out!

Side Note: For additional information regarding property acquired and disposed of in the same tax year and the rules behind it, please see IRS Publication 946 (How to Depreciate Property); Reg. 1.168(d)-1(b)(3).

Wow! What a crazy week it’s been! Running like mad, but I guess that beats the alternative. In a conversation with Chris Cuadros we were discussing the stimulus packages that Congress passed earlier this year that have an impact on dental office design, remodeling, and construction. I wrote about this on Monday in, “Getting in Shape.” Well, Chris was kind enough to send along some additional details on these incentives that I thought pertinent to share.

Extension of Bonus Depreciation.
Businesses are allowed to recover the cost of capital expenditures over time according to a depreciation schedule. Last year, Congress temporarily allowed businesses to recover the costs of capital expenditures made in 2008 faster than the ordinary depreciation schedule would allow by permitting these businesses to immediately write-off fifty percent of the cost of depreciable property (e.g., equipment, tractors, wind turbines, solar panels, and computers) acquired in 2008 for use in the United States. A bill currently in Congress would extend this temporary benefit for capital expenditures incurred in 2009.

Extension of Enhanced Small Business Expensing.
In order to help small businesses quickly recover the cost of certain capital expenses, small business taxpayers may elect to write-off the cost of these expenses in the year of acquisition in lieu of recovering these costs over time through depreciation. Until the end of 2010, small business taxpayers are allowed to write-off up to $125,000 (indexed for inflation) of capital expenditures subject to a phase-out once capital expenditures exceed $500,000 (indexed for inflation). Last year, Congress temporarily increased the amount that small businesses could write-off for capital expenditures incurred in 2008 to $250,000 and increased the phase-out threshold for 2008 to $800,000. A bill currently in Congress would extend these temporary increases for capital expenditures incurred in 2009.

So, even though there is only a chance, and my guess a fairly good one, that Congress will extend these benefits, now is the time to get started planning those dental office design, remodel, and construction projects to take advantage of these increased capital expenditure tax advantages.

Thanks Chris!

I have not been a student for many years now and do not have kids of my own, but I still seem to work my mental calendar around the start of school each year. More so than even New Years, the start of school each Fall seems like a time to begin new projects, set new goals, and begin again. This year, I’ve vowed to get in shape.

I’ve always been somewhat of a health and fitness nut. I’ve watched my diet for many years now and exercised regularly. However, three years ago I suffered a hip injury that really set my exercise regime into a tailspin. I’ve struggled ever since to maintain a regular program as I’ve worked to rehabilitate my hip. Last Friday I began a new program and so far so good. I’m starting day four and feeling great! That’s an important factor in being able to keep any program going.

I’m also taking this time to whip my office into shape and start some fresh initiatives with my business. I’m in the process of hiring an intern and a sales rep to move my business to the next level. I’m excited about these steps and what they can mean for the future of Küster Dental Office Design.

What steps can you be taking to add new excitement and energy to your business this Fall? What would a fresh coat of paint, new carpeting, furniture, and artwork do for your work environment? As part of the Federal Stimulus package, a business can take up to 50% bonus depreciation this year and the Section 179 deductions have been increased from $125,000 to $250,000. Perhaps now is a good time to be looking at a remodel or freshening of your dental office design? Chances are if you are planning anything major, you won’t be able to complete everything by the end of the year, but just think how good you and your staff will feel starting 2010 in an updated dental office? You’ll get a psychological boost to your business now, at the start of the school year, and again at the start of the New Year! A double whammy! Plus, if planned right you’ll be able to take advantage of those great Federal stimulus incentives for doing so.

After the high levels of activity at EAA’s AirVenture Oshkosh in July, activity has continued to strengthen in the marketplace.  AirFleet participated at Flying’s Parade of Planes in Lawrenceville, Georgia (www.paradeofplanes.com) on August 12-15, and a continuation of high quality activity seemed to follow.

One of the top online sources of aircraft listed for sale, www.Controller.com reflects a slight but continuing decrease in available aircraft (inventory), now down 6% from the high-point in mid-April 2009.   UBS Bank confirms this as reported in their August Business Jet Monthly, that used aircraft inventories have finally started to dip lower.  While it’s a very small dip – we’re looking for any evidence that the trend is reversing.

Working in our favor;  the 3rd Quarter tax incentive which expires on September 30th.  The 3rd Quarter is often an excellent time for an aircraft purchase, as a buyer can write-off 20% of the purchase with only 3 months’ expense remaining in the calendar year (for closings on September 30).  But in addition to this base tax incentive, the stimulus program is offering another 50% bonus in depreciation in the first year.  This is a real incentive to new aircraft buyers, and should stimulate strong qualified activity through the end of the 3rd Quarter.

The aircraft lending market, while having seen some changes in the past year, remains strong in support of qualified buyers.  To catch you up, a couple of the changes in the aircraft lending market are outlined below:

1.  You may need to search harder to find an aircraft lender.  Through August 2009, 14 nationwide aircraft lenders have either ceased supporting aircraft financing or have restricted capacity.  However, Google is your friend – a quick Google search will display those still active (and the sponsored searches show who’s spending advertising dollars in support of the aircraft lending market).

2.  Down-payments have for the most part increased.  In most cases, the minimum down-payment has increased from 10% to 15% for private-use aircraft, and commercial use (i.e. leaseback or charter aircraft) terms start with 20% down.  10% down terms may still be available for small loans, but may also have additional stipulations such that the bank is only underwriting the highest credits with these terms.  However, if an underwriter perceives risk with the credit package, one of the best ways to overcome any deficiencies is to increase the down-payment.  If a company had poor financial performance in 2008, but has strong credit and net worth and can verify 2008 was a blip, it may need to consider a higher down-payment for their aircraft purchase (i.e. 30-35%).

3.  Underwriting time.  In recent years, it was common to expect a decision in less than a day on loans up to $1MM.  However, with the extra attention to detail in today’s market, underwriting is taking 1-2 business days – still much faster than financing a home.  For larger loans, the rule of thumb of 3-5 business days applies up to about $2MM, after which it may take 7-10 business days for larger ticket financing.

4.  Underwriting documentation.  In today’s environment, aircraft loans require full documentation (i.e. tax returns, bank statements).  Most aircraft loans are cash-flow driven, so traditionally the finance companies have requested 2-3 years Federal Tax returns and/ or Audited Financial Statements.  However, in 2009 “Cash is King”.  You should be prepared to provide verification (i.e. bank statements) of any cash or marketable securities (i.e. public stocks) that you list on your Personal Financial Statement.  While standards for cash flow analysis have not changed in 2009, banks are looking much more closely at personal and corporate liquidity.

5.  Rates remain exceptional.  Rates often vary depending on the size of the loan, down-payment, type of aircraft, and intended utilization of the aircraft, but an individual or company buying a new aircraft in September 2009 may expect an interest rate between 6.3% and 7% (with exceptions for higher or lower rates).

This morning I gave a presentation to the Central Arizona CCIM (Certified Commercial Investment Member) Chapter on the impact the Stimulus Package is having on the commercial real estate industry.  My goal was to educate the attendees on some of the tools available to players in commercial real estate from the American Recovery and Reinvestment Act of 2009 (“ARRA”) and the Treasury Department’s Financial Stability Plan to help get their deals moving and bring people to the closing table.

 Below are some of the highlights from the presentation.

• The ARRA impacts commercial real estate primarily through (i) provisions focused on green building and energy efficiency, which provide funds and loan guarantees to commercial property owners that make energy efficiency upgrades or otherwise invest in alternative energy systems for onsite power generation.provisions focused on green building and energy efficiency and (ii) business tax incentives, such as the extension of bonus depreciation for capital expenditures incurred in 2009, which allows commercial landlords and tenants to depreciate 50% of the cost basis for “qualified tenant improvements” in the first year the improvements are placed in service. 

• In tandem with the ARRA, the Treasury Department’s Financial Stability Plan includes several programs to restore the flow of credit to households and businesses and address troubled “toxic assets.”  These programs include (i) the Term Asset-Backed Securities Lending Facility (TALF), which was expanded last Friday to include commercial mortgage-backed securities in the efforts to combine capital provided by Troubled Asset Relief Program (TARP) with funding from the Federal Reserve to encourage lending through increasing the demand for securitized loans; and (ii) a Public Private Investment Program (PPIP) jointly run by the Treasury and the Federal Reserve, which will provide government subsidies and guarantees to private investors purchasing various troubled residential and commercial mortgage loans (“legacy loans”) and securities backed by such legacy loans (“legacy securities”). 

            For more information about the impact on commercial real estate from the American Recovery and Reinvestment Act of 2009, the Treasury Department’s Financial Stability Plan and other Recent Developments impacting your business please contact Scott J. Stein at (480) 889-8948 / scott@steinlawplc.com and visit www.steinlawplc.com.

Bonus Depreciation applies to MACRS property with a recovery period of 20 years or less, off-the-shelf computer software that is amortizable over three years, MACRS 25-year utility property, qualified leasehold improvement property, new nonresidential real property, and new residential rental property.

April 3, 2009, Fort Worth, TX – SourceCorp today announced a fundamental commitment to protect the environment by becoming an ENERGY STAR partner. SourceCorp through its voluntary partnership with the U.S. Environmental Protection Agency’s ENERGY STAR Program, will work to improve energy efficiency and fight global warming. SourceCorp believes that a strategic, corporate energy management program will help us enhance our financial health and aid in preserving the environment for future generations.

“With growing concern over the economy, companies should pursue every avenue for increasing cash and the Commercial Building Tax Deduction is one method that can help achieve this goal,” said Matt Rader, director of SourceCorp’s Commercial Building Tax Deduction division. “If your company owns or leases commercial buildings – which includes most types of buildings, including residential buildings with four or more stories above grade – and you have installed or retrofitted the property to be more energy efficient, you may be eligible for a deduction for part or all of the costs associated with the installation or retrofit. This opportunity allows for the potential immediate expensing of costs that would otherwise be capitalized and recovered through depreciation over 27.5 or 39 years.”

“Environmental responsibility is everyone’s responsibility – and today I’m pleased SourceCorp is taking this motto to heart,” said EPA Administrator Stephen L. Johnson.  “By making smart energy choices, SourceCorp is helping improve our nation’s energy and environmental outlook.”

SourceCorp Specialized Business Tax Consulting:
As the nation’s leading provider of specialized business tax services, SourceCorp helps clients maximize state and federal tax incentives, increase cash flow, minimize tax payments, and increase ROI.

Pay Less Tax. Save More Money.™

For more information about SourceCorp, visit www.SourceCorpTax.Com or call 1-817-732-5494.

Important Dates: Don’t Miss Out
• September 15: extended 2007 tax returns for corporations due
• October 15: extended 2007 tax returns for individuals and other business entities due

Window Of Opportunity Is Closing:
To receive this substantial cash flow benefit, you should schedule a Cost Segregation Study TODAY otherwise this opportunity will be missed.

Scheduling:
• Free benefit analysis and cost estimate: 2-5 business days from the time you contact us.
• Average project time: typically 30-45 days from acceptance of the initial free benefit analysis to delivery of the final cost segregation study (includes site visit).
• CPA work schedule: usually takes about 3-5 business days for your CPA to integrate the cost segregation results into the client’s tax return
• Total turn-around time: 35-55 days
• Contact us today to schedule your Cost Segregation Study

2008 Bonus Depreciation:
The Economic Stimulus Act of 2008 provides a significant tax incentive for businesses to make capital investments by adding a special 50% depreciation allowance for qualifying purchases. This special bonus depreciation allowance is available to all businesses and applies to most types of tangible personal property and computer software acquired and placed into service in 2008.

• You can receive a 50% bonus deduction on most shorter life property placed in service in 2008.
• Increases expenses that small businesses can deduct from annual income – to $250,000 from $128,000 in 2008 – the section 179 limit with a total cap of $800,000.

Why Clients Choose SourceCorp:
1. Celebrating our 25th year in business, we are the most trusted, experienced, reliable and financially stable specialized tax service provider in North America:
Founded in 1983, and owned by Apollo Management Group, we are the leading specialized tax service group in North America with many Fortune 500 clients, top 10 accounting firms, and the preferred provider by many leading CPA associations and networks. We specialize in a number of professional tax services that can help you minimize your taxable income under the rules and regulations of the Internal Revenue Code (IRC). Our services include LIFO Accounting, Cost Segregation Studies, R&D Tax Credit Services, and Green Building Tax Deductions.

2. We guarantee our work – our clients are always first:
Since 1983, we have maintained long-term client relationships, provided value-creating resources, and acted responsibly in helping our clients reach their goals. The secret to our success is not really a secret – we go the extra mile by providing unparalleled service excellence, reliability, and trust. Our promise to you: If you’re not 100% satisfied, we will make it right.

3. Complimentary review:
We will honestly tell you in advance whether or not the tax benefit is warranted before you engage our services. In other words, the initial estimate costs you nothing and you get to see up front whether or not to pursue the benefit. As a result, the vast majority of our clients trusts our counsel and have used our services again and again for decades. Contact us today to schedule your Cost Segregation Study

4. Complimentary audit assurance and support – we take responsibility:
After 25 years, we have seen a lot of boutique consulting businesses come and go. They offer all kinds of gimmicks to get your business such as setting unrealistically low pricing, contingent billing based on questionable benefits, commissioned sales people who have little or no industry experience, and who outsource your business to other firms who have no long-term interest in your company. The last thing you want is a service company that ends up going out of business and leaves you holding the bag when you or your clients are audited. We have successfully defended our studies during IRS examinations and have withstood the scrutiny of IRS audits as well as hundreds of CPA reviews. We don’t charge for Audit Insurance because we stand behind our work and we believe it’s the right thing to do. With other businesses here today and gone tomorrow, it makes sense to partner with a firm with a long history, financial strength, and who is recognized as the industry leader.

5. We are responsive:
We believe that our client relationships are a non-renewable resource. When you contact us, you can expect to receive a reply in 4 hours or less. Moreover, on average, our studies can be completed from initial analysis to final documentation from 2-6 weeks. With nearly 70 full-time staff members including CPAs, engineers, business professionals, marketing, tax specialists and with offices located throughout the US, we don’t outsource our work, so you’ll receive an answer from the people who are knowledgeable, experienced and passionate about your business in a timely and professional manner.

6. We go beyond SOX compliance:
We have successfully implemented process controls and data security measures that meet or exceed the following standards: Sarbanes-Oxley Act of 2002, Gramm-Leach-Bliley Act of 1999 (GLBA), and the Health Insurance Portability and Accountability Act of 1996 (HIPPA). Additionally, we carry $2M errors and omissions liability insurance with best-rated insurance firms. All projects are completed in-house. In fact many cost segregation providers outsource their studies to our company.

7. We build lasting relationships:
Most of our clients have been with us for decades. Average staff tenure is more than a decade. Though there are many “overnight” firms touting cost segregation services, why would you want to risk your trusted CPA/client relationships especially when you consider IRS audit potential. We are a tax benefit service company specializing in tax areas requiring significant accounting, financial, business, manufacturing, engineering and technology expertise. We are not a CPA firm, but because we have many CPAs on staff and in executive management, we understand the unique CPA/client relationship and work with your accounting firm or in-house accounting manager. As such, we build long-term relationships with our clients providing significant and leveraged experience and synergies. We bring value by helping you become more efficient and profitable.

8. We provide a one-source resource:
As your single-source specialized tax benefit provider, we can save you time and money. We deliver all the different elements of a specialized tax benefit service – a turn-key approach – that is not only more convenient, but is the most effective method to streamline the entire process. In addition to ensuring project consistency, working with one provider who assumes responsibility for the entire project from implementation to support maximizes efficiencies throughout the project, maintaining focus on project priorities, and increasing the flow of information so that best practices can be easily deployed and newly gained insights quickly shared with you and your management team.

9. We will find the maximized benefit:
We ensure the maximum benefit possible based on our 25-year experience, technical expertise, and understanding of your industry. Contact us today to schedule your Cost Segregation Study

Compare Our Process To Anyone In The Industry & Then Decide:
• Our highly qualified consultants perform a comprehensive and exhaustive examination of all construction documents, augmenting our findings with engineering based “take-offs”. We do not rely on common shortcuts such as misusing statistical sampling on dissimilar buildings; using an unsupportable rule-of-thumb approach; or taking a survey approach to our estimates.

• Our proprietary software allows “indirect” or “soft” costs to be allocated at three levels of specificity improving both the accuracy and the results of a cost segregation study. The majority of providers prorate the indirect costs to the entire project so that specialized engineering services, such as kitchen design, end up applied to non-qualified costs such as concrete slabs or earthwork. Our software ensures that your property is allocated to correctly maximize the benefit.

• For projects with multiple tenants, our proprietary software allows us to break out the results for each individual space. This is helpful to our clients in that it provides another layer of detail for fixed asset records as well as providing a basis for partial dispositions so the client knows what to write off when a tenant moves out

• In accordance with IRS recommendations, we visit virtually every building that we study. This ensures a thorough understanding of the facility; identifies personal property not reflected in the drawings and reduces unexpected surprises.

• On acquired properties, we correctly build up a replacement cost new and account for the physical depreciation through wear and tear of the building and personal property, prior to performing the actual study. Many cost segregation providers do not account for wear and tear and incorrectly treat all acquired property as new.

• We strive for consistency. Many providers are dispersed, the deliverables reflecting a specific office or individual and the estimated costs even differing from report to report for the very same item. We have centralized our production; created efficiencies and consistency through in-house databases, templates and software; and we have centralized our quality control to ensure standardization from the top down. Every report we provide uses the same database of costs, the same report structure and deliverable and the same classifications with the appropriate precedents.

• We assign a dedicated Account Manager to oversee your project through completion, which includes facilitating communication of process, information collection and expected completion date.

• We involve the CPA in every major decision throughout project.

• We’ve developed an internal tracking program designed to list missing information for each project for the Account Manager to collect.

• We rely on a professional in-house staff comprised of individuals with experience in the construction industry such as architects, engineers and construction science majors.

• We have in-house CPAs and research staff that are proactive in identifying relevant case law, legislation or IRS opinions augment our engineering staff.

• Our staff has many years of “Big 4” experience.

• We provide up to 40 hours of audit support with every report – we maintain a very successful track record in audits.

• Reports are designed specifically to reflect the IRS’ description of a “quality” cost segregation study.

• A detailed electronic audit trail increases the audit ability of the study and ensures that years down the road, every report, its work papers and phone logs are readily accessible with a few key strokes.

• Our SARBOX compliant archival process and work papers digitally vouches for the results of our studies and ensures the confidentiality of your records.

Conclusion:
SourceCorp has a national Cost Segregation practice with the required knowledge and expertise to meet IRS requirements for cost segregation. We have a strong commitment to quality and are proud to lead the field in IRS-accepted studies. We understand that any good business decision is based on the cost versus the benefit received. Our clients recognize the combination of value and quality they receive, which results in a tremendous amount of repeat business. With completed studies resulting in the deferral of more than $1 billion in taxes for our customers, we have earned an unparalleled reputation as the highest quality provider in the Cost Segregation industry.

Contact us today to schedule your Cost Segregation Study

Contact Information:
Matthew Rader
214.762.5198
Director, Cost Segregation Services
matthew.rader@SourceCorptax.com

Chris Henderson
817.732.5494
Director of Operations
chris.henderson@SourceCorptax.com

Information for Businesses: Frequently Asked Questions & Answers
Don’t miss out. You still have until Oct. 15 to file a tax return to claim your payment this year. Bonus depreciation allows taxpayers to take a deduction of 50% of all property placed in service with a class life of 20-years or less. The remaining basis for the shorter life property gets depreciated over the applicable MACRS recovery period. For every $1 million of 5-year property, the deduction will be approximately $600,000 in the first year.

Bonus Depreciation Qualifications:
To qualify for bonus depreciation in the first year, several criteria must first be met:

• Depreciable property will qualify if the original use of the property commences with the taxpayer after December 31, 2007 and before January 1, 2009 but only if no written binding contract for the acquisition of the property was in effect before December 31, 2007.

• Qualifying property is MACRS property that has a recovery period of twenty years or less.

• It may not be property that is required to be depreciated under the alternative depreciation system of section 168.

Whether you are buying, building or improving a building, SourceCorp can help maximize your income tax deductions through our in-depth cost segregation service.

Click here for your FREE Bonus Depreciation/Cost Segregation Analysis

Q. Am I entitled to the business portion of the stimulus package even if my adjusted gross income exceeds the threshold that phases out the basic credit?

A. The individual and business parts of the legislation are separate and have different qualifications.

Q. What types of acquisitions will qualify for the 50 percent depreciation deduction? I am specifically wondering if farm buildings will qualify for this accelerated depreciation.

A. To qualify for this deduction, property must have a recovery period of 20 years or less. Farm buildings normally qualify since they have a general depreciation recovery period of 20 years. The alternative recovery period of 25 years does not have to be considered unless the property is required to be depreciated under the Alternative Depreciation System.

Q. What changed in 2008 for businesses under the Economic Stimulus Act?

A. Changes include increased section 179 limits and special depreciation allowance for certain property. Note: the linked page reflects both 2007 and 2008 changes.

Q. What effect does the Stimulus Act have on section 179 depreciation?

A. The Act changed two things: it increased the amount of the 179 depreciation deduction and it raised the phase-out amount. Without the new law, the 179 depreciation deduction limit in 2008 would have been $128,000. It’s now increased to $250,000. The phase-out rule reduces the allowable 179 depreciation deduction if the amount of section 179 property you place in service exceeds a set amount for the year. That amount would have been $510,000 for 2008 but the Act increased it to $800,000.

Q. What is 50 percent special depreciation?

A. The 50 percent special depreciation is for new, tangible assets purchased and placed into service in 2008. For these assets, a taxpayer is entitled to depreciate 50 percent of the cost or other basis during the year the asset is placed into service. The remaining cost or other basis would be depreciated over the normal life of the asset.

Q. Is 50 percent special depreciation new in 2008?

A. Special depreciation was originally in effect from Sept. 11, 2001 through Dec. 31, 2004. After 2004 special depreciation was available for only the Liberty Zone in New York and the Gulf Opportunity Zone. The Stimulus Act again makes special depreciation available throughout the entire United States.

Q. Can 50 percent special depreciation be used along with other types of depreciation?

A. Yes, it is possible for an asset to qualify for up to three different types of depreciation at the same time in the year the asset is placed into service. An asset can qualify for section 179 depreciation, 50 percent special depreciation and a regular depreciation method such as modified accelerated cost recovery system or MACRS simultaneously.

Q. Can you provide an example of how these three depreciation types can be used in conjunction with one another?

A. To illustrate, let’s assume a small business owner paid $400,000 for a qualifying asset — equipment, for instance — and placed it into service in 2008.

*First, he applies the section 179 depreciation provision to deduct the new maximum 179 depreciation deduction, or $250,000. That leaves $150,000 that has not yet been depreciated.
*Next, he takes the remaining $150,000, and applies the 50% special depreciation for an additional deduction of $75,000.
*That leaves the other 50 percent, or $75,000, to which he can apply MACRS. If the asset is a five year asset, he would be able to deduct 20 percent of the remaining $75,000 cost or basis, for an additional $15,000 deduction.

Using all three of these tax provisions would produce a $340,000 deduction in 2008 for an asset that cost $400,000.

Q. What if I do not want to use special depreciation?

A. If you choose not to use special depreciation, you must elect out of it in writing on your tax return.

Q. Is special depreciation allowed against the Alternative Minimum Tax?

A. Yes, special depreciation is allowed against both regular tax and Alternative Minimum Tax.

Q. Do all states follow the federal depreciation rules?

A. No. From Sept. 1, 2001 through Dec. 31, 2004, twenty-five states did not follow the federal special depreciation rules. Check with your state taxation agency or your accountant to see if your state is following the federal special depreciation rules.

Q. Is there a new depreciation and amortization form for fiscal year filers?

A. Yes, Form 4562-FY and instructions are now available.

Q. What property qualifies for special depreciation?

A. See the 2008 section of the Depreciation and Section 179 Expense information for examples of qualifying property, determining tests and property that does not qualify.

Click here for your FREE Bonus Depreciation/Cost Segregation Analysis

On The Web: IRS Source

Whether you are buying, building or improving a building, SourceCorp can help maximize your income tax deductions through our in-depth cost segregation service.

About SourceCorp:
Celebrating our 25th year in business, SourceCorp Professional Services provides Energy Efficient Commercial Tax Deduction Certification, LIFO Accounting, R&D Tax Credit Studies, Bonus Depreciation, and Cost Segregation Studies. With a team of nearly 70 professionals and with offices located throughout the country, SourceCorp helps clients realize unparalleled experience, services, and trust. SourceCorp serves many of the nation’s most prominent CPA firms, Associations, and Fortune 1000 companies. For more information, please call 817.732.5494 or visit www.SourceCorpTax.com.

The Economic Stimulus Act signed by President Bush on February 13, 2008 helps businesses in two ways. It gives companies a 50% bonus deduction on most shorter life property placed in service in 2008. And it increases — to $250,000 from $128,000 in 2008 — the section 179 limit on expenses that small businesses can deduct from annual income, with a total cap of $800,000.

Bonus depreciation allows taxpayers to take a deduction of 50% of all property placed in service with a class life of 20-years or less. The remaining basis for the shorter life property gets depreciated over the applicable MACRS recovery period. For every $1 million of 5-year property, the deduction will be approximately $600,000 in the first year.

Bonus Depreciation Qualifications:
To qualify for bonus depreciation in the first year, several criteria must first be met:

* Depreciable property will qualify if the original use of the property commences with the taxpayer after December 31, 2007 and before January 1, 2009 but only if no written binding contract for the acquisition of the property was in effect before December 31, 2007.
* Qualifying property is MACRS property that has a recovery period of twenty years or less.
* It may not be property that is required to be depreciated under the alternative depreciation system of section 168.

Whether you are buying, building or improving a building, SourceCorp can help maximize your income tax deductions through our in-depth cost segregation service.

There are several advantages in choosing SourceCorp as your Cost Segregation Study provider:

1. SourceCorp: Single-Source Capability
As your single-source Cost Segregation Study provider, we will save your client and your firm both time and money. Choosing one provider that can deliver all the different elements of a Cost Segregation Study – a turn-key approach – is not only more convenient, but is the most cost effective method to streamline the entire process.

2. SourceCorp: Industry Specific Knowledge & Experience
In business since 1983, we draw upon 25-year’s industry expertise from proven real-world experience and can offer unmatched strategic and tactical advice. This long-earned industry knowledge can quickly steer your project in the right direction—minimizing implementation time and maximizing ROI.

3. SourceCorp: Process Orientation
In a successful Cost Segregation solution, understanding the process is as important as supplying effective technological tools. SourceCorp possesses experience in your industry and capabilities related to process orientation providing a winning combination.

4. SourceCorp: Flexibility, Compatibility, and Responsiveness
As an experienced Cost Segregation Study provider, we will track changes and become aware of hidden needs within the project. Armed with this knowledge, we are able to foresee and respond to future issues, providing solutions with minimal disruption to current processes.

5. SourceCorp: A Standardized Approach & Fixed Fee
We provide a standard approach and fixed fee billing. We maintain standardized methodologies, processes and technologies. This way project work is compatible across our entire organization as well as providing the most powerful tools available.

6. SourceCorp: Free Initial Analysis
We build lasting relationships. We will honestly tell you if it is worthwhile to pursue the study at no cost to you.

If you would like to discuss these options further or would like to visit with one of our Cost Segregation Directors, please contact:

Matt Rader
Phone: 817.732.5494, x133

Or you can complete our online information form at: SourceCorpTax.com