Project Description

Final regs set out rules on deduction vs. capitalization of tangible property costs—Part I
IRS has issued final regs that provide guidance on the application of Code Sec. 162(a) and Code Sec. 263(a) to amounts paid to acquire, produce, or improve tangible property. These important new regs will affect virtually all taxpayers that acquire, produce, or improve tangible property. This article, first in a series examining the complex new final regs, explains how they define materials and supplies, as well as rotable and temporary spare parts, and prescribe new rules and elective de minimis and optional methods for handling their cost.

Final regs set out rules on deduction vs capitalization of tangible property costs—Part II
IRS has issued long-awaited final regs that provide guidance on the application of Code Sec. 162(a) and Code Sec. 263(a) to amounts paid to acquire, produce, or improve tangible property. These new regs will affect virtually all taxpayers that acquire, produce, or improve tangible property. This article, the second in a series, explains how the final regs define materials and supplies and rotable and temporary spare parts, and how they prescribe new rules and elective de minimis and optional methods for handling their cost.

Final regs set out rules on deduction vs capitalization of tangible property costs—Part III
IRS has issued long-awaited final regs that provide guidance on the application of Code Sec. 162(a) and Code Sec. 263(a) to amounts paid to acquire, produce, or improve tangible property. This article, the third in a series, explains the new rules for what constitutes a unit of property (UOP) for capitalization purposes (including separate rules for personal property and buildings), an expanded routine maintenance safe harbor (now applies to buildings as well as non-buildings), a new safe harbor allowing small real estate owners to expense a limited amount of improvement costs, and how to treat repairs if they are made simultaneously with improvements.

Final regs set out rules on deduction vs. capitalization of tangible property costs—Part IV
IRS has issued long-awaited final regs providing guidance on the application of Code Sec. 162(a) and Code Sec. 263(a) to amounts paid to acquire, produce, or improve tangible property. This article, the fourth in a series, focuses on determining whether an amount improves, betters, or restores property.