2014 hftp presentation don't just write us off, we have a life 10.24.14
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Transcript of 2014 hftp presentation don't just write us off, we have a life 10.24.14
Don’t Just Write Us Off, We Have a Life!Allison Gillette, Tax Manager, CPA, CHAEMiriam Krisher, Senior Audit Manager, CPA
The material appearing in this presentation is for informational purposes only and is not legal or accounting advice. Communication of this information is not intended to create, and receipt does not constitute, a legal relationship, including, but not limited to, an accountant-client relationship. Although these materials may have been prepared by professionals, they should not be used as a substitute for professional services. If legal, accounting, or other professional advice is required, the services of a professional should be sought.
Tug of War
Tug of War Capitalization Policies
Expense or Capitalization
Various Treatments Preparation Conclusion
Capitalization Policies
• GAAP– General Rules
• Tax– New IRS regulations
• Safeharbor: Provisions in a regulation that affords protection from a liability or penalty under specific situations or if certain conditions are met.
Tug of War Capitalization Policies
Expense or Capitalization
Various Treatments Preparation Conclusion
Expense or Capitalization
• extends the life,
• increase the capacity, or
• improve the efficiency or safety of the property.
Tug of War Capitalization Policies
Expense or Capitalization
Various Treatments Preparation Conclusion
What’s in a Building?
• Unit of property– Building structure– Building systems
• HVAC• Plumbing systems• Electric systems• All escalators• All elevators• Fire protection system• Security system• Gas distribution system
Tug of War Capitalization Policies
Expense or Capitalization
Various Treatments Preparation Conclusion
Asset Lives
**Scheduled to expire as of December 31, 2013
Tug of War Capitalization Policies
Expense or Capitalization
Various Treatments Preparation Conclusion
Property Description Book Life Tax Life Eligible for Sec. 179 or Bonus**
Furniture 5-15 years 7 years Yes
Restaurant Furniture N/A 5 years Yes
Fixtures 5-15 years 7 years Yes
Equipment 5-15 years 5 years Yes
Software 36 months 36 months Yes
Building 40 years 39 years No
Improvements 15 years 39 years No
Qualified Improvements** N/A 15 years Yes
Qualified Leasehold Improvements**
N/A 15 years Yes
GAAP vs Tax
• Preopening/Startup costs
• Leasehold improvements
• Goodwill and other intangibles– Impairment: Assets are said to be impaired when their net carrying value,
(acquisition cost - accumulated depreciation), is greater than the future undiscounted cash flow that these assets can provide and be disposed for.
• Loans fees
Tug of War Capitalization Policies
Expense or Capitalization
Various Treatments Preparation Conclusion
Making your Life Easier
• Planning for your audit
• Tax planning
Tug of War Capitalization Policies
Expense or Capitalization
Various Treatments Preparation Conclusion
Questions?Contact Information:
Allison Gillette- [email protected]
Miriam Krisher- [email protected]
Tug of War Capitalization Policies
Expense or Capitalization
Various Treatments Preparation Conclusion