Take Advantage of This Amazing Tax Opportunity When a taxpayer disposes of a portion of an asset used for making money, like a building, the disposed components have a taxable value that can be deducted in the year the assets were retired. This is missed by EVERY OTHER cost segregation firm as well as 95% …
Did You Renovate Your Commercial Property in 2022? Read More »
When and how do you change a method of accounting to use the final tangibles regulations? Under the Internal Revenue Code, a change in the method of accounting is usually a change in the handling of an expenditure. Meaning in the case of the tangible property regulations, the expenditure must be expensed or capitalized, or …
How to File a Tax Method Change to take advantage of the Tangible Property Regulations Read More »
Generally, the final tangibles regulations don’t change the rules for deducting materials and supplies. The final tangibles regulations use existing court cases to decide on the exact definition and treatment of materials and supplies but added some safe harbors to provide clarification. Unfortunately, clarification from the IRS can sometimes just further confuse everyone. Materials and …
How do the Final Tangibles Regulations Change Deducting Materials and Supplies? Read More »
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 …
How to Fully Take Advantage of the De minimis Safe Harbor Read More »
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 …
Frequently Asked Questions Regarding Capitalization Versus Expense Read More »
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 …
What is a Negative 481a Adjustment, and How Do I Get One? Read More »
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 …
The Most Overlooked Tax Savings Opportunity for Building and Residential Rental Owners Read More »
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, …
How do I Decide Whether to Expense or Depreciate Expenditures on my Building? Read More »
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 …
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 …
