Knowledge Center

  • RSS Feed
  • Contact
  • Print

KNOWLEDGE CENTER >

Delayed Application of the Tangible Property "Repair" Regulations

January 22, 2013

Crystal A. Germanese, CPA
Tax Manager

On December 23, 2011 the IRS issued regulations on the deduction and capitalization of expenditures related to tangible property and accounting for, and dispositions of, depreciable property. The regulations, issued in temporary and proposed form, were originally applicable to tax years beginning on or after January 1, 2012.

However, in anticipation of the issuance of the final regulations in 2013, the IRS announced a delayed application date. The temporary regulations have been amended to apply to tax years beginning on or after January 1, 2014. The IRS announced that portions of the temporary regulations addressing the de minimis capitalization rule, dispositions and the safe harbor for routine maintenance will be revised and potentially simplified when the regulations become final.

In Notice 2012-73, the IRS advised taxpayers that the regulations would be amended to reflect the delayed application while permitting taxpayers to choose to apply the temporary regulations to taxable years beginning on or after January 1, 2012 and before the applicability date of the final regulations. Taxpayers choosing to apply the provisions of the temporary regulations to taxable years beginning on or after January 1, 2012, and before the applicability date of the final regulations, may continue to obtain the automatic consent of the Commissioner of Internal Revenue to change their methods of accounting under Revenue Procedures 2012-19, 2012-14 I.R.B. 689, 2012-20, 2012-14 and I.R.B. 700. For taxpayers choosing to apply the provisions of the final regulations to taxable years beginning on or after January 1, 2012, the Internal Revenue Service and the Treasury Department expect to publish procedures for obtaining automatic consent to change a method of accounting when the final regulations are published.

Disclaimer: Under U.S. Treasury Department guidelines, we hereby inform you that (1) any tax advice contained in this communication is not intended or written to be used, and cannot be used by you, for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service (or state and local or other tax authorities), and (2) no part of any tax advice contained in this communication is intended to be used, and cannot be used, by any party to promote, market or recommend any transaction or tax-related matter(s) addressed herein without the express and written consent of Blum, Shapiro & Company, P.C.
 

 

Advisors | Auditors | Consultants | CPAs - Blum Shapiro is one of the premier public accounting firms in the northeast and a Top 100 CPA Firm in the U.S. Our professionals serve businesses, individuals and organizations in Boston (MA), Hartford (CT), Cranston (RI), Shelton (CT) ,Quincy (MA) and Newton (MA) with audit, tax and business consulting services. Our firm has developed practice areas in automotive, construction, education, government, healthcare, hospitality, manufacturing, nonprofit organizations and professional service firms. New Haven CT, Fairfield CT, Norwalk CT, Waterbury CT.