Tangible Property (Repair Regs)

    Tangible Property Regulations - Repair Regs Guidance and Resources 


    Background

    Pile of wrenches,nuts and bolts

    On Feb. 13, 2015, the IRS announced simplified procedures for the final tangible property regulations with the release of Rev. Proc. 2015-20. The much anticipated relief permits small businesses to change a method of accounting on a prospective basis, and avoid completing and filing a Form 3115, Application for Change in Accounting Method. Additionally, the IRS has announced a plan to update the Form 3115 and they will also be revising the instructions and addressing Notice 2015-29 later in the year.

    All taxpayers with depreciable assets or who buy, sell, improve, or dispose of assets must comply with the regulations for tax years beginning on or after Jan. 1, 2014. Certain businesses may need to file Form 3115 to request a change in accounting method, as well as potentially make new annual elections. Please click here for history and background information on the tangible property regulations.

     

    AICPA Tangible Property Resources

    Below are resources developed for AICPA members to aid in the understanding and implementation of Rev. Proc. 2015-20; Tangible Property Regulations:

    Webcasts

    Practice Aids
    Informed Client Consent Letter: Sample letter to assist in communicating the implications of the Tangible Property Regulations to clients who qualify as small business taxpayers under Rev. Proc. 2015-20.
    Repair Regs Flowchart: Resource to help you determine when to capitalize or expense a purchase/item (developed by Squire)
    Repair Regs Client Communication Letter: Sample template letter intended to provide high-level guidance on the new repair regs and encourage the client to consult their CPA to discuss the implications (developed by Squire)
    Overview of Tangible Property Regulations: One-page, high-level overview of the new repair regulations, including the recent small business relief with Rev. Proc. 2015-20 written to practitioners; can be used as a companion to the quick summary chart below (developed by Squire)
    Quick Summary Chart of the Final Tangible Property Regulations: High-level overview, including definitions, guidance, dispositions, and more
    Sample Written Book Capitalization Policy: De minimis safe harbor template for use in establishing a capitalization policy
    Tangible Property Regulations: Questions and Answers: Dec. 19, 2013

    Practice Aids from Eric P. Wallace, CPA

    Eric Wallace is a Director at Boyer & Ritter, CPAs and Consultants. He is well known for his expertise in tangible property regulations (section 263(a)); change in accounting methods; NOLs; and Change in Accounting Methods (IRS Form 3115). Eric and the Firm have been the experts on the TPR issues (sections 162, 167, 168, 263(a) and 1016) since their issuance in late 2011.

    Below are resources developed for AICPA members, featured articles, and information regarding the TPR Toolkit:

    Quick Reference Guide: Tangible Property Regulations: What to File, Where, and When
    Examples of the Required and Non-Required Filings of the Tangible Property Regulations
    Unit Property Considerations for Landlord Tenant Improvement
    Consequences of Not Filing the Required Tangible Property Regulation 3115s by Tax Year 2014
    Comprehensive Tangible Property Toolkit - Extensive tools and templates to assist CPA firms and large companies in implementing the highly complex tangible property regulations (TPRs) issued by the IRS. They are a compilation of Word, pdf, Excel, and voice files covering TPR examples (completed 3115s to client communications), tools, templates, and related supporting training for a firm or large business to use to implement the TPRs for its clients or Company. Free trial available; call for pricing.

    News & Updates

    Additional Information

    Regulations, Procedures, and More from the IRS
    • Change of address for filing Form 3115
    • IRS Publication 538, Accounting Periods and Methods
    • 2014 Form 3115 and instructions
    • Tangible Property FAQs
    • Rev. Proc. 2015-20: the new simplified procedure is generally available to small businesses, including sole proprietors, with assets totaling less than $10 million or average annual gross receipts totaling $10 million or less, Feb. 13, 2015
    • Rev. Proc. 2015-13: provides general procedures to obtain both the advance (non-automatic) and automatic consent to change a method of accounting, Jan. 16, 2015
    • Rev. Proc. 2014-54: provides procedures for taxpayers to adopt the new disposition regulations, Sep. 18, 2014
    • Final regulations (T.D.9689) regarding dispositions of depreciable property, Aug. 14, 2014
    • Second part of guidance on accounting method change (Rev. Proc. 2014-17) which superseded Rev. Proc. 2012-20, Feb. 28, 2014
    • Rev. Proc. 2014-16 provides procedures for taxpayers to adopt the final "repair" regulations, Jan. 24, 2014
    • Proposed regulations (REG-110732-13) under section 168 regarding dispositions of tangible depreciable properties, Sep. 13, 2013
    • IRS finalized "repair" regulations (T.D. 9636) under sections 162 and 263, Sep. 13, 2013

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