SKR+Co Alert: Capitalization policy requires action NOW! Plus year-end tax strategies, charitable giving, and new mileage rates!
Take action now! Final tangible property ("repair") regulations require written policy by January 1, 2014
As we shared in an October Tax Alert and in our recent tax seminar, the IRS has issued final regulations which govern the capitalization of materials and supplies, amounts paid to acquire or produce tangible property, and expenditures relating to the betterment, adaptation, and restoration of tangible property. One part of the regulations – the De Minimus Expensing Rule – requires taxpayers to have a written policy in place at the beginning of the taxable year to be able to expense amounts paid for:
Property costing less than $5,000 per item/invoice, if there is an audited financial statement, or
Property costing less than $500 per item/invoice and with a useful life of 12 months or less, if there is not an audited financial statement.
To help you take advantage of the new rules, we recommend you prepare a written policy before January 1, 2014. A sample written policy from the AICPA can be accessed HERE.
Note: We recommend you use this policy in place of the one handed out at the tax seminar as more information has become available.
To read the full article sent October 23, 2013 on the final regulations, Click Here.