Safe Harbors

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

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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Building for Routine Maintenance Safe Harbor

Routine Maintenance Safe Harbor

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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Small Taxpayer Safe Harbor

The Tangible Property Regulations include a Safe Harbor for small taxpayers. This safe harbor is an excellent opportunity for (among others) single-family residential rentals, apartment complexes, and student housing. This Safe Harbor, within the Tangible Property Regulations (under §263a), allows all expenditures under the lesser of $10,000 or two percent (2%) of the unadjusted basis …

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