SKR+Co Tax Alert: Big changes for businesses owning tangible property
The IRS has released its final regulations on the tax treatment of expenditures related to tangible property. The regulations provide guidance on how to comply with Sections 162 and 263 of the Internal Revenue Code, which require the capitalization of amounts paid to acquire, produce or improve tangible property but allow amounts for incidental repairs and maintenance of property to be deducted.
This article examines the final regulations, which primarily focus on how taxpayers determine whether expenditures are for deductible repairs or capital improvements.
If you have expenditures related to tangible property, the final regulations apply to you. Compliance may require changes to your current capitalization procedures and the filing of Form 3115, “Application for Change in Accounting Method.”
This is a complicated topic. If after reading the article you have questions about how this applies to you, please contact us.
Read the Full Article Here.