Kevin Jerry, Author at TPTM

How to Fully Take Advantage of the De minimis Safe Harbor

De minimis Safe Harbor: An Administrative Convenience for the Service and the Taxpayer The Tangible Property Regulations under §263a provide three safe harbors designed to help small and large taxpayers avoid the Regulations’ complex and sometimes confusing nuances. These Regulations determine whether expenditures spent on assets currently in service must be expensed or capitalized. The …

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Looking at Investing in a Gas Station or Convenience Store? You must read this.

Gas stations and convenience store (c-store) properties that qualify as a ‘retail motor fuel outlet’ can be depreciated over fifteen years. The standard depreciation life for a commercial property is 39 years. However, the Tax Cuts and Jobs Act passed in 2017 (TCJA) allows for 100% bonus depreciation of qualified property with a recovery period …

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Frequently Asked Questions Regarding Capitalization Versus Expense

The Tangible Property Regulations / By Kevin Jerry / November 23, 2022 November 23, 2022

What you should know about the Tangible Property Regulations 1. What exactly are the tangible property regulations? §162 of the Internal Revenue Code allows you to deduct all the standard and necessary expenses you experience during the taxable year. This includes the costs of materials and supplies, repairs, and general maintenance. The opposite of §162 …

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What is a Negative 481a Adjustment, and How Do I Get One?

3115s, 481a, Cost Segregation, Method Change, The Tangible Property Regulations / By Kevin Jerry / November 16, 2022 November 16, 2022

When a tax method change occurs, whether it is from cost segregation, the Tangible Property Regulations, or any other tax method changes (for which the cutoff method cannot be used), a 481a adjustment must be used. Suppose income for any taxable year is under a different method of accounting from the method used in the …

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The Most Overlooked Tax Savings Opportunity for Building and Residential Rental Owners

Safe Harbors, The Tangible Property Regulations / By Kevin Jerry / November 9, 2022 November 16, 2022

Routine Maintenance Safe Harbor Building owners! Under the Tangible Property Regulations, passed in 2014, you are not required to capitalize as an improvement or betterment, which means you can expense amounts that meet the following criteria: Amounts paid for recurring activities which keep the property in its ordinarily efficient operating condition, AND you reasonably expect …

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How do I Decide Whether to Expense or Depreciate Expenditures on my Building?

Expenditures, RABI Rules, The Tangible Property Regulations / By Kevin Jerry / November 1, 2022 November 1, 2022

Have the Tangible Property Regulations changed the rules for determining whether an expenditure is a deductible repair or a capital improvement? The Tangible Property Regulations put existing case law and prior tax regulations into a structure to help you determine whether an expenditure is deductible or must be capitalized because it’s a major improvement, restoration, …

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What is a Unit of Property?

The Tangible Property Regulations, Unit of Property / By Kevin Jerry / October 24, 2022 October 24, 2022

The Unit of Property (UOP) concept is not new, but the rules are new to The Tangible Property Regulations under § 1.263(a). In the past, the regulations did not define property for the purposes of determining whether an expenditure after an asset is placed into service adds value to the property, extends the useful life …

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Alternative Valuation Method for Inherited Property

Inherited Property / By Kevin Jerry / October 19, 2022 October 19, 2022

An Alternative Valuation Method is Available for Inherited Property Once the amount of any gain or loss is determined, the taxpayer must decide whether or not it is long-term or short-term. The capital gain or loss is long-term if the investment property is held for more than one year. The capital gain or loss is …

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The End of Many Miscellaneous Deductions

Miscellaneous Deductions / By Kevin Jerry / October 12, 2022 October 12, 2022

Beginning in 2018, many miscellaneous deductions have been suspended. Beginning in 2018, many miscellaneous deductions have been suspended. These suspended deductions will impact your taxable income if you are a building owner or investor. However, many of our clients have told us that the Tangible Property Regulations have reduced taxes enough to offset these eliminated …

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Routine Maintenance Safe Harbor

Safe Harbors, The Tangible Property Regulations / By Kevin Jerry / October 5, 2022 October 5, 2022

The Routine Maintenance Safe Harbor is one of the most overlooked safe harbors within the mandatory Tangible Property Regulations under §263a (1-3). If you are cost-segregating a property, you can assume your cost segregation firm has never heard of the Routine Maintenance Safe Harbor. The reason is the majority of cost segregation firms, especially the …

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