What is it? Federal Depreciation Look-Back Analysis is a process, performed by Integrity, that can help you to find funding solutions or simply increase cash flow. In a nutshell, this process identifies tax depreciation that can be accelerated into the current year enabling your company to convert prior fixed asset investments into cash. This cash can then be used to fund growth.
How does it work? Quite simply via asset reclassification and componentization. That’s a mouthful, but what it essentially means is that you can create a tax reduction that can be converted into cash that you can use right now, not five or ten years from now. Any number of types of organizations can benefit from Federal Depreciation Look-Back Analysis including manufacturers, banks, hotels, retail establishments and more.
What assets are included?
• Buildings
• Machinery
• Equipment
• Furniture
|
• Vehicles
• Tools
• Software
• Computers |
| • All other depreciated or amortized assets |
How does my company benefit? The simplest way to explain how your company benefits is to look at the end result of the Look-Back process as an interest-free loan. By claiming past and future depreciation expense benefits, you offset current tax liability, which in turn frees up cash no longer needed to pay corporate tax liabilities.