COSTS & BENEFITS

In September 2013, the IRS released final regulations providing rules regarding the tax treatment of materials and supplies and the capitalization of costs of acquiring, maintaining and improving tangible property. These regulations are effective for tax years beginning on or after Jan 1, 2014. Over...

Full description

Saved in:
Bibliographic Details
Published in:California CPA 2015-06, Vol.83 (10), p.13
Main Author: Wright, Kathleen K
Format: Article
Language:English
Subjects:
Accumulated depreciation
Capital assets
Compliance
Conformity
Passive activity
Revenue procedures & rulings
Small business
Tax elections
Tax regulations
Tax returns
Taxpayers
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:In September 2013, the IRS released final regulations providing rules regarding the tax treatment of materials and supplies and the capitalization of costs of acquiring, maintaining and improving tangible property. These regulations are effective for tax years beginning on or after Jan 1, 2014. Overall, the rules provide a significant benefit to many taxpayers, but the benefits came with a cost: Burdensome compliance. Rev Proc. 2014-16 (I.R.B. 2014-7, Jan 24, 2014) and other related guidance led many to believe that every taxpayer who filed a depreciation schedule in their tax return would be required to file a Form 3115 (Request/or a Change of Accounting Method) with their 2014 tax returns to properly adopt these rules. After an outpouring of requests for simplification, the IRS released Rev Proc. 2015-20 (I.RB. 2015-9, Feb 13, 2015), which provides the taxpayer with an election that eliminates this requirement. As with any election, there are trade-offs. This article describes the election and its implications.
ISSN:1530-4035