Is an expenditure associated with tangible property deductible or must it be capitalized? Learn the rules for treatment of amounts paid to acquire, produce, repair, or improve tangible property and proper accounting for dispositions of property subject to depreciation. The capitalization regulations provide objective standards and bright-line rules intended to simplify compliance with the capitalization provisions contained in section 263(a) of the Internal Revenue Code. This program highlights issues involving what must be capitalized, what can be treated as a repair and items related to depreciation of fixed assets.
Course ID: DRFA
Depreciation, Repairs, and Fixed Assets: Tax Considerations
- ?Apply capitalization rules in general
- Identify exceptions for Materials and Supplies
- Account for costs associated with Rotable spare parts
- Apply “De Minimis” rules for entities with an “applicable financial statement”
- Determine amounts considered “spent to acquire tangible property”
- Identify improvements to tangible property ?
- Unit of property definitions, including special rules applicable to real property ?
- Leased property rules for lessees and lessors ?
- Routine maintenance safe harbors
- Determine what is a “betterment” of property
- Recognize and capture costs of restoration of property
- Definition of adapting a property to a new or different use.
- Determining property that qualifies for 179 expensing treatment
- Applying cost recovery rules.
- Regulations under Code Sections 162, 167, 168, 263(a) and 263A
- Elections dealing with fixed assets including o De minimis rules o Section 179 expensing o Small taxpayer real estate maintenance rules
- Determination of depreciable lives and methods
- Understanding when an asset is placed in service for depreciation purposes