tangible property regulations - Linkenheimer LLP CPAs & Advisors

IRS Tangible Property Regulations and What We Can Do for You

This tax season, we are diligently working with our clients to analyze depreciation schedules with the new IRS Tangible Property Regulations in mind. The effort has paid off with finding over $3,000,000 of additional deductions on 2013 and prior capitalized assets. These additional deductions could be worth anywhere from $1,000,000 to $1,500,000 in saved federal and California income taxes. So, if we contact you regarding your fixed assets and doing a review for the new Tangible Property Regulations give us a hand because it could give you a big payback. If we haven’t talked to you, consider making contact with us regarding this review before you file your 2014 tax returns.

By Linkenheimer LLP|2020-09-03T20:05:28+00:00April 6th, 2015|Tangible Property Regulations|0 Comments

IRS Clarifies Tangible Property Regulations

IRS Clarifies Tangible Property Regulations: The IRS has released new answers to Frequently Answered Questions (FAQs) on the final tangible property regulations, including information on simplified procedures for small business taxpayers. The FAQs provides guidance on the de minimis safe harbor election, which allows many businesses to do away with capitalizing and depreciating (or claiming a Section 179 expense) for many lower-cost assets, such as furniture, equipment, and computers. They also clarify that the de minimis safe harbor election is not a change in accounting methods and does not require the filing of Form 3115 (Application for Change in Method of Accounting). Nor does a taxpayer need to file a Form 3115 to stop using the de minimis safe harbor for a subsequent tax year. Additionally, the FAQs explain the rules for the treatment of materials and supplies costs. The IRS’s FAQs on the tangible property final regulations are available at http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Tangible-Property-Final-Regulations . If you still have questions on how the tangible property regulations may affect you and your business, please contact your Linkenheimer CPA.

By Linkenheimer LLP|2015-03-26T20:19:45+00:00March 24th, 2015|Tangible Property Regulations|0 Comments

Update Regarding the Tangible Property Regulations

Update: The IRS issued Revenue Procedure 2015-20 0n Friday, February 13, effective for tax years beginning on or after January 1, 2014, that provide a “small business exception” for taxpayers to adopt the tangible property regulations without the filing of Form 3115, (Application for Change in Accounting Method), if a set of conditions are met.

Each separate and distinct trade or business (the most important requirement is that the activity maintains a complete and separable set of books and records, meaning the activity qualifies for its own methods of accounting on their own), qualifies for the small business exception if at least one of the following conditions is met:

The activity has total assets of less than $10 million as of, or after January 1, 2014.
Average annual gross receipts of $10 million or less for the prior three taxable years.

Taxpayers who use the small business exception will forfeit certain benefits that are only available to those who file Form 3115 for their first tax year beginning on or after January 1, 2014. Before your 2014 income tax return is filed, you must decide whether to apply the small business exception or file Form 3115 . […]

By Linkenheimer LLP|2020-09-03T20:05:31+00:00February 24th, 2015|Tangible Property Regulations|0 Comments

Tangible Property Regulations That Will Effect Every Business and Property Owner

Deducting and capitalizing business expenses under final regs

An important development this year will affect every business, including yours. The IRS has issued long-awaited regs on the tax treatment of amounts paid to acquire, produce, or improve tangible property. The regs explain when those payments can be deducted, which confers an immediate tax benefit, and when they must be capitalized.

These final regs retain many provisions of the temporary regs that were issued in 2011. However, the final regs refine and simplify the temporary regs and add new safe harbor provisions that will help you to nail down expense deductions.

The regs must be followed for tax years that begin after Dec. 31, 2013 – whether a calendar year or a fiscal year, such as a fiscal year beginning July 1, 2014. Taxpayers have the option of applying the final regs retroactively to the 2012 and 2013 tax years. There’s also a third option to apply the temporary regs to the 2012 and 2013 tax years.

The regs are lengthy and complex. The summary below is intended to give an overview of how they treat issues of deduction and capitalization. We would be happy to […]

By Linkenheimer LLP|2020-09-03T20:05:32+00:00February 12th, 2015|Tangible Property Regulations|0 Comments