Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
IRS Publishes New Regulations for Deductible Business Repairs
Author: Scarinci Hollenbeck, LLC
Date: October 4, 2013
Key Contacts
Back
The Internal Revenue Service released a new set of guidelines governing tax-deductible business repairs, which may finally put an end to disputes and challenges between the federal tax agency and companies.
The new rules, which broaden the scope of business expenditures that may qualify as deductible asset repairs, may help limit the number of corporate tax audits the agency takes on each year, especially as it seeks to operate within a tightened budget. The regulations may also help companies reduce their liability, as they may now deduct costs that were previously prohibited under the law. The final guidelines, which replace temporary rules that have been in place since December 2011, will affect all taxpayers who acquire, produce, or improve tangible property.
The IRS raised many dollar-amount thresholds, including the previous $100 threshold for property that is exempt from capitalization to $200. The agency also changed the treatment of additional costs of acquiring property subject to the safe harbor to include additional invoice costs, such as delivery fees. The final rules simplify the de minimis safe harbor by requiring that all materials and supplies be included if taxpayers elect to use the safe-harbor method. The IRS will also allow business owners with gross receipts of $10 million or less to elect to deduct, for buildings that initially cost $1 million or less, the lesser of $10,000 or 2 percent of the adjusted basis of the property for repairs.
The IRS has been working on these tangible property repair regulations since 2004, and the updated version of the tax law will go into effect on January 1, 2014. As the rules – which are outlined in a 220-page document – are final and quite expansive, business owners should consider contacting a legal or tax professional to learn more about their options and obligations under the new guidelines.
- Practices: Tax and Trusts & Estates, Corporate Transactions & Business, Real Property Tax Strategies, Sophisticated Estate Planning & Wealth Preservation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Rule 26 Expert Discovery: When an Expert Witness Uses AI, Is It Discoverable?
Case law following the 2010 amendments to Federal Rule of Civil Procedure 26 offers guidance on how courts are likely to address whether an expert witness’s AI records are subject to discovery. Key Takeaways Rule 26 Expert Discovery After the 2010 Amendments This article addresses the question courts and lawyers have faced in recent cases: […]
Author: Chris Seelinger
How Expert Witness AI Use Ends Up in Discovery
“Show how 3M is 0% at fault.” The absurd tale of how a 350-page ChatGPT history for 3M’s expert witness was produced during a deposition is more likely than you think. It’s an inevitable trend, and an unsettled question for federal courts as experts make generative AI part of their workflow. Key Takeaways Expert Witness […]
Author: Chris Seelinger
The Screenshot Problem: Why Nothing Is Really Private Anymore
Screenshots have changed the risks of electronic communications. The screenshot problem is that messages intended for one person or a small group can be copied, forwarded, preserved, and ultimately presented to opposing counsel, regulators, journalists, customers, or a jury. Businesses should recognize that a truly private digital conversation is increasingly unreliable and ensure their policies, […]
Author: Sean M. Pena
BESS Project Agreements: Allocating Risk Among Developers, EPC Contractors, and Equipment Suppliers
Developers, engineering, procurement, and construction (EPC) contractors, and equipment suppliers each play a critical role in completing a BESS project. However, when equipment costs rise, deliveries are delayed, or regulations change, determining who bears the financial consequences can become contentious. Well-drafted project agreements are essential to sound risk allocation. Key Takeaways This article is Part […]
Author: Nicholas Wall
IP Infringement: What Steps Can You Take If You're Affected?
IP infringement occurs when someone uses your intellectual property without your permission or beyond the scope of the permission you granted. Common examples of IP infringement include copying a product’s patented features or using a trademarked logo in a way that is likely to confuse consumers about the source or affiliation of goods or services. […]
Author: Michael Mietlicki
Public Allegations, Unfinished Investigation: What New Jersey Businesses Should Do Next
When facing public allegations of wrongdoing, companies should not let the speed of the public conversation dictate the speed of an investigation. An investigation designed to confirm a preferred narrative rather than establish the facts can create serious problems later, particularly if litigation, regulatory scrutiny, or employment claims follow. Key Takeaways When public allegations surface […]
Author: Sean M. Pena
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.