Tangible Property Regulations Guidance and Resources

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.

Featured Resources

Articles

• Guide to Expensing Roofing Costs, Tax Insider, June 2017
• IRS Extends Waiver to Ease Transition to File Certain Tangible Property Regs. Method Changes, The Tax Adviser, May 2017
• Automatic Accounting Method Change Procedures Updated, The Tax Adviser, April 2017
• New Audit Technique Guide for Capitalization of Tangible Property, The Tax Adviser, Feb. 2017
• IRS Clarifies Definition of "Construction of Real Property" for Purposes of Sec. 199, The Tax Adviser, Jan. 2017
• Eligibility Rule Waiver Extended for Taxpayers Adopting Repair Regs., The Tax Adviser, Dec. 2016
• Application of Partial Asset Dispositions and the De Minimis Safe Harbor, The Tax Adviser, Oct. 2016
• Benefiting from New Tangible Property Regulations and Disposal Provisions, The Tax Adviser, Sept. 2016
• Avoiding Cost Segregation Recapture Tax, Tax Insider, Aug. 2016
• What Taxpayers Need to Known to Comply With the Final Tangible Property Regulations, The Tax Adviser, April 2015

External Resources

IRS Forms and Publications

• Form 3115, Application for Change in Accounting Method 
• Instructions to Form 3115 
• Publication 538, Accounting Periods and Methods 

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. 2017-30: 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.

Learning

Self-Study

• Depreciation, Amortization, and Property Transfers: Issues and Strategies: This guide provides an in-depth analysis of the rules addressing depreciation, amortization, and the sale of property, with an emphasis on identifying unique planning opportunities and pitfalls.

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Reviewed Aug. 1, 2017