Understanding the new tangible asset regulations

Natalie Tucker
Director, McGladrey LLP

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Though the temporary regulations defining the tax treatment of tangible assets and repairs have been out for several months, many financial and tax executives have not had the resources or time to assess how these new rules will impact their companies' tax filings and financial statements for 2012. This may be attributable to the relatively late enactment of the rules considering an initial 2012 effective date, as well as the rules' voluminous and complex nature. In addition, some aspects of the rules are still expected to change before being finalized in early 2013. Recognizing the constraints imposed by this timing, the IRS and Treasury recently delayed the effective date of the rules until 2014.

So what should companies do now? We suggest they begin assessing how the new rules impact their particular business situations. Now is the time to begin scoping which areas of the rules will result in tax benefits and what information and resources will be needed to implement the new rules once they are finalized. While the effective date may have been delayed, companies have the ability to selectively early adopt provisions of the regulations. Some companies have been surprised by just how beneficial some of the new provisions can be. For example, some have found savings by reviewing capitalization policies to identify routine maintenance costs, and by examining the historical treatment of components of buildings.

Please download our whitepaper "Understanding the New Tangible Asset Regulations" to learn more about these new rules as currently written, our observations about potential revisions and be sure to check back for future developments.

Disclaimer
The information contained herein is general in nature and based on authorities that are subject to change. McGladrey LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. McGladrey LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

This article represents the views of the author or authors only, and does not necessarily represent the views or professional advice of McGladrey.