Recent IRS rulings allow commercial property owners to use shorter lives and accelerated methods for computing depreciation for tax purposes. This new application includes all categories of buildings purchased or built since 1986—new, existing or renovations. The increased depreciation is used as a deduction against ordinary income at higher tax rates, and many MREC clients are surprised to learn how many aspects of their projects can be depreciated on shorter timelines similar to the way their equipment and built-in cabinetry are treated.
The potential for an immediate increase in cash flow from reduced taxes can be significant, and MREC utilizes third-party experts to help its clients maximize savings. Our clients use their own CPA or tax attorney to complete the appropriate tax forms using the depreciation provided from our study.