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The tangible property regulations will affect business owners in all industries, especially those in manufacturing, retail, hospitality and real estate.

Tangible Property Regulations

On September 13, 2013, the U.S. Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) released final and proposed regulations (tangible property regulations) on the proper tax treatment of expenditures related to tangible property. The newly released regulations replace temporary and proposed regulations issued at the end of 2011 and will apply to tax years beginning on or after January 1, 2014.
The recently released final and proposed tangible property regulations provide detailed guidance related to the treatment of materials and supplies, capitalization of costs related to the production or acquisition of tangible property,  new de minimis safe harbor elections and how to determine if costs related to tangible property are currently deductible as repairs or if they should be capitalized.

What does this mean to me?

Companies need to begin addressing how the new tangible property regulations will impact their organizations prior to the new year so that they can be ready for the January 1, 2014, effective date.  Prior to the effective date, companies need to begin to prepare by:
  • Reviewing your accounting policies and procedures to ensure they are in compliance with the new regulations
  • Analyzing and calculating the impact of the regulations on your organization
  • Developing a plan to maximize opportunities offered by the new regulations

How can we help?

Plante Moran’s professional team of advisors are dedicated to helping your organization focus on planning opportunities and analyzing the impact of the tangible property regulations on your business.  Our advisors routinely combine their collective industry knowledge and experience so they can offer you exceptional ideas and creative solutions.

Plante Moran’s team of knowledgeable advisors have created a video series that addresses some of the key elements of the tangible property regulations.  The subjects include;
  • De Minimis Safe Harbor: AFS
  • De Minimis Safe Harbor: Non-AFS
  • Routine Maintenance Safe Harbor
  • Rotable Spare Parts

We hope this information will allow you to gain a better understanding of the tangible property regulations and how they impact your organization.  Our skilled team of advisors is ready to  help you address the opportunities and challenges of the new regulations.

Tangible Property Contacts

Nate Buchalski

Jonathan Winterkorn

Emily Murphy

Richard Robrahn