Tag Archives: repair regulation

Repair Regulation Relief – Relief or Stomach Ache?

The IRS has revamped the tangible property regulations for the 2014 tax year.  The new procedure allows small businesses to change a method of accounting under the final tangible property regulations on a prospective basis for the first taxable year beginning on or after Jan. 1, 2014.

“Taxpayers must evaluate certain expenditures to determine whether the costs are immediately deductible repair cots or capital improvements that need to be depreciated. In addition, regulations issued at Section 1.162-3 provide new guidance on when a taxpayer can deduct costs incurred to acquire “materials and supplies.”

The IRS is waiving the requirement to complete and file a Form 3115 for small business taxpayers that choose to use this simplified procedure for 2014.

The new simplified procedure is generally available to small businesses, including sole proprietors, with assets totaling less than $10 million or average annual gross receipts totaling $10 million or less. Details are in Revenue Procedure 2015-20, posted February 13, 2015 on IRS.gov.

For a great discussion on the pros and cons and details check out this Forbes article.  Repair Regulation Relief – What Does It Really Mean? (Not as Much as you think).

IRS. gov and Forbes.com

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