Capitalization vs. Repair
UPDATED LB&I DIRECTIVE for Taxpayers Who Adopted a Method of Accounting Relating to the Conversion of Capitalized Assets to Repair Expense under I.R.C. Section 263(a) March 22, 2013
UPDATE: December 4th, 2012 CCH Tax Brief
CCH has updated its analysis of the comprehensive repair/capitalization regulations based on the recent announcement by the IRS in Notice 2012-73. Click the link above to learn more.
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.
Our integrated team of tax and accounting method specialists, and cost segregation engineers are pleased to bring you FreedMaxick’s CapX Consulting ServiceSM – a comprehensive program designed to bring business taxpayers into compliance with the new regulations. The delayed effective date of January 1, 2014 and the option to early adopt sections of the temporary or final regulations before 2014 gives business taxpayers a unique opportunity to utilize these regulations for tax planning purposes.
Program Overview: CapX Consulting ServicesSM
Consultation regarding the following:
Change in accounting methods for materials and supplies
Change in accounting methods for temporary or rotable spare parts
Change in the definition of a unit of property
Improvements to tangible property
Routine maintenance safe harbor
Dispositions of tangible property
General Asset Account elections and Multiple Asset Account elections
De minimis safe harbor election
Identify previously capitalized costs that may be deductible
Identify previously deducted costs that may require capitalization
Identify changes in accounting methods and procedures
Prepare tax forms 3115 necessary to report a change accounting method(s) and the related 481(a) adjustment(s)
Prepare a report summarizing the accounting methods and changes to prior year fixed asset records
Assist with updating fixed asset records for accounting method changes
To learn more about how these regulations can be used for tax planning purposes before 2014, contact us here.
You can also view our 11-part video series on YouTube for more detailed information.
We may be based in New York State, however Freed Maxick provides tax services to business all over the U.S., no matter your location: Alabama, AL; Alaska, AK; Arizona, AZ; Arkansas, AR; California, CA; Colorado, CO; Connecticut, CT; Delaware, DE; Florida, FL; Georgia, GA; Hawaii, HI; Idaho, ID; Illinois; IL; Indiana, IN; Iowa, IA; Kansas, KS; Kentucky, KY; Louisiana, LA; Maine, ME; Maryland, MD; Massachusetts, MA; Michigan, MI; Minnesota, MN; Mississippi, MS; Missouri, MO; Montana, MT; Nebraska, NE; Nevada, NV; New Hampshire, NH; New Jersey, NJ; New Mexico, NM; New York; NY, North Carolina, NC; North Dakota, ND; Ohio, OH; Oklahoma, OK; Oregon, OR; Pennsylvania, PA; Rhode Island, RI; South Carolina, SC; South Dakota, SD; Tennessee, TN; Texas, TX; Utah, UT; Vermont, VT; Virginia, VA; Washington, WA; West Virginia, WV; Wisconsin, WI; Wyoming, WY. We Serve all 50 States.
CONTACT US to learn more.
ABOUT US: Freed Maxick CPAs is Western and Upstate New York’s (NY) largest public accounting firm and a Top 100 firm in the U.S. Freed Maxick provides audit, tax and consulting services to closely-held businesses, public (SEC) companies, not-for-profits and governmental entities in Buffalo, Rochester, Syracuse, Albany and NYC, New York.