Minimizing Property and Income Taxes: Tactics to Tighten Fixed-Asset and Real Property Controls and Processes

Up to 30% of Fixed Assets are Maintained on Books Unnecessarily

Recording of a 90-minute CPE webinar with Q&A

Conducted on Tuesday, September 2, 2008

Program Materials

Description

In the hustle and bustle of everyday business, even sophisticated corporations leave gaps in their books and systems that can lead to consistent overpayment of property taxes. One advisory firm estimates that up to 30% of U.S. companies' fixed assets have been retired but are still being carried on the books.

Unrecorded retirements, mistaken capitalizations of costs, and erroneous classifications of property all are significant sources of costly mistakes from a tax standpoint for both major corporations and smaller companies.

Learning best practices from other companies' tax professionals and from experienced advisors can give property tax specialists a fresh perspective to identify internal problems with fixed-asset books, tax systems and record-keeping procedures — and to make the necessary changes to minimize taxes.

Listen as our panel of experienced advisors and corporate tax specialists shares their experiences in tackling and rectifying this ongoing source of property tax overpayment.

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Outline

  1. Unrecorded Retirements Of Fixed Assets
    1. The need to regularly change software to track current values of property, equipment and other assets
    2. Identifying operating and non-operating assets
    3. Recognizing depreciation differences between financial statements and tax reporting
    4. “Ghost assets” that stay on the books after they’ve outlived their usefulness
    5. Carrying a single machinery/equipment category on the fixed-asset books when multiple categories are justified
    6. Addressing problems with a systematic approach
      1. How tax pros can enlist assistance from operating divisions
  2. Miscapitalization Of Costs
    1. Identifying mistakes in capitalizing asset-related costs that don’t add value
    2. Problems triggered by raising the capitalization threshold
    3. Capitalizing equipment expenditures that more properly should be considered repairs
    4. Treatment of relocations of production areas
    5. Developing a consistent capital-vs.-expense policy
    6. Establishing a records structure that has property tax savings in mind
  3. Erroneous Property Classifications
    1. Problems in initial categorizations of assets and their assignment to the general ledger
    2. Which accounts should be considered real or personal property?
    3. Dealing with differences in effective asset lives
    4. Developing a systematic approach to re-evaluate a company’s classifications

Benefits

The panel prepares you to do a more effective job of compliance in these and other areas:

  • Unrecorded retirements: Creating a process to consistently identify retired assets and get them off the books.
  • Mistakes in classifying expenses: Weeding out the mistakes in capitalizing asset-related costs that don't add value.
  • Erroneous property classifications: Reevaluating categorizations to catch mismatches that increase your company's property tax bill.

Faculty

Mindy McLees
Mindy McLees
Vice President and National Sales Director
AccuVal Associates

She has more than 20 years of experience in real and personal property tax management. She previously worked for Joseph...  |  Read More

Thomas Brown
Thomas Brown
Senior Vice President of Practice Development
American Appraisal

He currently oversees the firm's staff development and training, and previously was National Practice Leader for its...  |  Read More

Paul Chaben
Paul Chaben
Business Development Manager
Asset Management Resources

He has been with the fixed asset management consulting firm since 1992 and a firm director since 2001. He has more than...  |  Read More

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