All taxpayers with depreciable assets or who buy, sell, improve, or dispose of assets must comply with the tangible property regulations for tax years beginning on or after Jan. 1, 2014. Certain businesses may need to file Form 3115, Application for Change in Accounting Method, to request a change in accounting method, as well as potentially make new annual elections. This page offers guidance to help CPA tax practitioners with compliance, practice management, and ethical considerations surrounding the tangible property regulations.
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|Checklists, Practice Guides, and Templates
- Deduct Your Demolished Building Using a General Asset Account, The Tax Adviser, May 2016
- New Revenue Procedure Updates List of Accounting Method Changes, The Tax Adviser, May 2016
- New Form 3115 Required, IRS Announces, Journal of Accountancy, Mar. 2016
- Tax Implications of the New Revenue Recognition Standard, The Tax Adviser, Feb. 2016
- Applying the Tangible Property Regulations for Tax Year 2015, The Tax Adviser, Dec. 2015
IRS Forms and Publications
Final Tangible Property Regulations
- T.D. 9636: Final tangible property regulations on the deduction and capitalization of expenditures related to tangible property (Sept. 2013). Correcting amendment (July 2014).
- T.D. 9689: Final tangible property regulations on modified accelerated cost recovery system (MACRS) property dispositions (Aug. 2014). Correcting amendment (Dec. 2014).
Revenue Procedures and Notices
- Rev. Proc. 2016-29: Lists automatic changes to which the automatic change procedures in Rev. Proc. 2015-13 (or successor) apply.
- Notice 2015-82: Addresses the increase to $2,500 in the de minimis safe harbor limit for taxpayers without an applicable financial statement (effective for costs incurred during tax years beginning on or after Jan. 1, 2016).
- Rev. Proc. 2015-20: Explains the simplified procedures that are generally available to small businesses with assets totaling less than $10 million or average annual gross receipts totaling $10 million or less (effective for tax years beginning on or after Jan. 1, 2014).
- Rev. Proc. 2015-13: Provides general procedures to obtain both the advance (non-automatic) and automatic consent to change a method of accounting. Generally effective for Forms 3115 filed on or after Jan. 16, 2015 for a year of change ending on or after May 31, 2014.
IRS Audit Technique Guide (ATG)
- Capitalization of Tangible Property: This ATG is for examiners to use as a tool for identifying potential tax issues involving capitalization and dispositions of tangible property; it's useful to practitioners to understand how audits may be structured.
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