Deduct or Capitalize: Final Repair Regulations Summary
By Scott Fraker, Senior Accountant
Until recently, the IRS regulations allowed a fair amount of judgment in classifying expenditures as deductible repair and maintenance or as a capital improvement (subject to deferral of the deduction as depreciation expense). The latitude in the decision making process was reduced considerably on September 19, 2013 when the IRS issued final tangible property capitalization regulations. The new regulations will affect every business. The final regulations, generally effective for tax years beginning in 2014, are lengthy, complex, and will directly impact your return.
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