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Tax alert: 2016 repair/capitalization/depreciation filing update

September 6, 2016 Article 1 min read
Authors:
Michael Monaghan James Minutolo Robert Shefferly III Jonathan Winterkorn
What's the difference between a repair and a capital expenditure? This article explains.

Every taxpayer that uses tangible real or personal property in a business needs to understand the tax rules relating to the distinction between a repair and capital expenditure, as well as the depreciation of those capitalized expenditures and other depreciable assets that are purchased or produced.

This briefing covers recent developments relating to repair, capitalization, and depreciation as embodied in the final “tangible property regulations,” also known as the “repair regulations.” In addition, significant changes to depreciation provisions, such as bonus depreciation and the Section 179 allowance, were made by the Protecting American from Tax Hikes Act of 2015 (PATH Act) (P.L. 114-113). Many of these changes first went into effect in 2016 and will need to be considered when preparing 2016 returns. This briefing also details these changes.

Many of these changes first went into effect in 2016 and will need to be considered when preparing 2016 returns.

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The information provided in this alert is only a general summary and is being distributed with the understanding that Plante & Moran, PLLC, is not renderinglegal, tax, accounting, or other professional advice, position, or opinions on specific facts or matters and, accordingly, assumes no liability whatsoever inconnection with its use.

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