Temporary Regulations Could Be Beneficial

by Tim Marshall 22. February 2012 11:00
  Late in 2011, the Internal Revenue Service released new regulations on the treatment of certain costs incurred relating to tangible property. The new regulations provide guidance on issues such as materials and supplies expenses and safe harbor for routine maintenance expenses on tangible property. These temporary deductions will affect some of the regulations that have been in place since 2008 regarding tangible property. The new rules provide clarity on the following –      What constitutes an improvement to a unit of property      Whether an expense is attributable to a building improvement      Disposition of property      The definition of a unit of property      Revisions to loss recognition rules There is an opportunity for taxpayers to take advantage of these temporary regulations. Costs that would have otherwise been capitalized may qualify as deductible costs under this new regulation. In some cases, a ‘catch – up’ deduction will help taxpayers capture missed deductions in the year of their method change.   
Categories: Tax