IRS and Treasury Department Publish Temporary Regulations on Treatment of Tangible Property
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©2012 Wolters Kluwer. All rights reserved. 1 Standard Federal Tax Reporter (2012), IRS News Release IR-2011-126, Internal Revenue Service, (Dec. 27, 2011) Click to open document in a browser IRS News Release IR-2011-126, December 27, 2011. [Code Secs. 162 , 165 , 167 , 168 , 263 , 263A and 1016 ] Tangible property: Expenditures to acquire, produce or improve: Deductions: Capitalization.– The IRS has released temporary and proposed regulations that provide guidance on the application of Code Secs. 162(a) and 263(a) to amounts paid to acquire, produce or improve tangible property. Back references: ¶8600 , ¶8605AC, ¶8620 , ¶8627AC, ¶8753 , ¶8753BC, ¶9901 , ¶9901BC, ¶11,010 , ¶11,010BC, ¶11,018 , ¶11,018BC, ¶11,020 , ¶11,020BC, ¶11,275AB , ¶11,275AF, ¶11,275B , ¶11,275BF, ¶11,276P, ¶11,276S, ¶13,700C , ¶13,700K, ¶13,701 , ¶13,702BC, ¶13,703 , ¶13,703L, ¶13,704 , ¶13,704BC, ¶13,704K, ¶13,811 , ¶13,813BC, ¶29,414 and ¶29,414D. IRS and Treasury Department Publish Temporary Regulations on Treatment of Tangible Property WASHINGTON—The Internal Revenue Service and Treasury Department today published in the Federal Register temporary regulations that provide guidance to taxpayers on the treatment of amounts paid to acquire, produce or improve tangible property and regarding the accounting for, and dispositions of, property subject to depreciation. These regulations provide objective standards and bright-line rules intended to simplify compliance with the capitalization provisions contained in section 263(a) of the Internal Revenue Code. The temporary regulations generally are effective for expenditures made on or after Jan. 1, 2012, and therefore these regulations do not affect taxpayers' 2011 tax returns. The IRS and Treasury Department anticipate publishing additional guidance that will advise taxpayers regarding how to obtain automatic consent to change to a method of accounting provided in the temporary regulations for taxable years beginning on or after Jan. 1, 2012. These automatic consent requests may be filed beginning with taxpayers' 2012 tax returns. Taxpayers may not request a change to a method described in the temporary regulations on their 2011 tax returns. The temporary regulations also were released as a notice of proposed rulemaking, offering taxpayers the opportunity to comment on the rules. Written comments are requested by March 26, 2012, and a public hearing on the regulations is scheduled for April 4, 2012.
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The IRS recently issued Regulations that will make it easier for business owners to determine the difference between currently deductible expenditures for repairs and maintenance and capital expenditures that must be depreciated.
Transcript of IRS and Treasury Department Publish Temporary Regulations on Treatment of Tangible Property
©2012 Wolters Kluwer. All rights reserved.1
Standard Federal Tax Reporter (2012), IRS News ReleaseIR-2011-126, Internal Revenue Service, (Dec. 27, 2011)
Click to open document in a browser
IRS News Release IR-2011-126, December 27, 2011.
[Code Secs. 162, 165, 167, 168, 263, 263A and 1016]
Tangible property: Expenditures to acquire, produce or improve: Deductions: Capitalization.–The IRS has released temporary and proposed regulations that provide guidance on the applicationof Code Secs. 162(a) and 263(a) to amounts paid to acquire, produce or improve tangible property.Back references: ¶8600, ¶8605AC, ¶8620, ¶8627AC, ¶8753, ¶8753BC, ¶9901, ¶9901BC, ¶11,010,¶11,010BC, ¶11,018, ¶11,018BC, ¶11,020, ¶11,020BC, ¶11,275AB, ¶11,275AF, ¶11,275B, ¶11,275BF,¶11,276P, ¶11,276S, ¶13,700C, ¶13,700K, ¶13,701, ¶13,702BC, ¶13,703, ¶13,703L, ¶13,704, ¶13,704BC,¶13,704K, ¶13,811, ¶13,813BC, ¶29,414 and ¶29,414D.
IRS and Treasury Department Publish Temporary Regulations on Treatment of Tangible Property
WASHINGTON—The Internal Revenue Service and Treasury Department today published in the FederalRegister temporary regulations that provide guidance to taxpayers on the treatment of amounts paid toacquire, produce or improve tangible property and regarding the accounting for, and dispositions of, propertysubject to depreciation. These regulations provide objective standards and bright-line rules intended tosimplify compliance with the capitalization provisions contained in section 263(a) of the Internal RevenueCode.
The temporary regulations generally are effective for expenditures made on or after Jan. 1, 2012, andtherefore these regulations do not affect taxpayers' 2011 tax returns. The IRS and Treasury Departmentanticipate publishing additional guidance that will advise taxpayers regarding how to obtain automaticconsent to change to a method of accounting provided in the temporary regulations for taxable yearsbeginning on or after Jan. 1, 2012. These automatic consent requests may be filed beginning with taxpayers'2012 tax returns. Taxpayers may not request a change to a method described in the temporary regulationson their 2011 tax returns.
The temporary regulations also were released as a notice of proposed rulemaking, offering taxpayers theopportunity to comment on the rules. Written comments are requested by March 26, 2012, and a publichearing on the regulations is scheduled for April 4, 2012.
