All About ASC 740 and the New Capitalization vs. Repair Regulations (Part 10)

Author: Don Warrant

In December of 2011, the IRS published comprehensive new regulations governing capitalization vs. deductible repair expenditures for tangible property. For many taxpayers this will mean making changes to accounting methods and systems, new tax compliance requirements, new tax planning opportunities, and on a positive note, the chance to expense items capitalized as improvements in prior tax years.

Taxpayers can implement method changes in 2012, 2013 or 2014 according to IRS Notice 2012-73.  Therefore, taxpayers should incorporate the method changes provided by the new regulations in their tax planning for 2012, 2013 and 2014.

Highlights

  • tangible asset regulationsTangible asset and repair regulations are prospective
  • Should not impact financial statement period prior to March 7, 2012
  • Taxpayers need to evaluate ASC 740 reserves based on intent to file Form 3115s pursuant to Rev. Proc. 2012-19 and Rev. Proc. 2012-20

Our CapX Program

FreedMaxick's CapX (Capitalization or Expense) Consulting Service is a comprehensive program designed to quickly and efficiently bring you into compliance and optimal tax savings. Click here for more information or call Don Warrant at 716-847-2651.

Click here for all the articles in this blog series.