Given the increased tax benefit created by the Tax Cuts and Jobs Act (TCJA) relative to the acceleration of depreciation (through bonus depreciation), hopefully companies will soon begin to expand their capital spending programs, despite the findings of this survey which report that only 21% of CFO’s expect to increase capital spending.

Here is one significant benefit: non-real property assets e.g. equipment, etc. can be expensed immediately rather than over 39 years, thereby providing a significant cash tax savings. Alvarez & Marsal is helping many companies take advantage of this savings by conducting cost segregation studies, which reallocate costs from a 39-year category to shorter lives. A preliminary, complimentary analysis to estimate the net present value savings from a cost segregation study provides a no-risk approach to ascertaining if a study is economically worthwhile.