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Cost segregation applies MACRS to those short-life assets accelerating depreciation and reducing the hotel owner’s income tax burden. This results in an increased cash flow in the first 6 years of ownership for a newly acquired or constructed hotel. Intermediate Acct II Mid Term Flashcards | Quizlet service life refers to the length of time an asset is of use to its original owner, while A. physical life refers to how long the asset will be used by all owners. B. physical life is always longer than service life. C. physical life is the life of an asset without consideration of salvage value and service life requires the use of salvage value. Cash Method and Tax Schedule C | Chron.com Cash Method. By using the cash method, a small business proprietor can record income as soon as it comes in for tax purposes. If a sale is made, the cash is immediately available to report to make ...