Capitalize or expense? That is the first of many decisions for those who purchase buildings, equipment, and other tangible property. In 2014, the IRS issued the final piece of the new tangible property regulations which deal with capital expenditures, materials and supplies, repairs and maintenance, asset dispositions, and other major accounting items. The most significant item involves the IRS’ view on what should be capitalized versus what can be expensed.

Today the IRS issued welcomed guidance and relief for small business taxpayers making it easier to apply the “repair regulations” to 2014 and future years. While it appeared that most businesses would need to file multiple Forms 3115 to comply with the new rules, this guidance simplifies the procedure for small businesses ($10 million and less in assets).

Here is the announcement from the IRS:

http://www.irs.gov/uac/Newsroom/IRS-Makes-it-Easier-for-Small-Businesses-to-Apply-Repair-Regulations-to-2014-and-Future-Years

Here is an article from Forbes:

http://www.forbes.com/sites/peterjreilly/2015/02/13/john-koskinen-saves-tax-season-with-form-3115-relief-for-small-business/

If you have any questions about these complex new rules, please call us.