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Understanding the New Repair Regulations – The Capitalization of Tangible Assets


Product Code - TMW93
Speaker(s): Gian Pazzia, KBKG Cost Segregation
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On December 23, 2011, the IRS issue the long-awaited regulations regarding the deduction and capitalization of expenditures related to tangible property, i.e., the “Repair Regulations”. These regulations are effective for taxable years beginning on or after January 1, 2014 but taxpayers and have the option to apply them to the 2012 and 2013 tax years. Now is the time to get up to speed so you can advise your clients appropriately. They are applicable businesses in all industries for taxpayers that acquire, produce, replace, or improve tangible property.

Although the regulations include many of the rules that were contained in the prior proposed regulations and prior law, the regulations also include several significant new rules. The regulations cover changes to Sections 162(a), 167, 168, and 263(a).

This webinar will help you understand what implications the regulations may have on businesses, what opportunities the regulations present, what action, if any, must be taken to comply with the regulations, and when such action must be taken.

Objectives:

Repair Regulations Overview and Practical Considerations 

  • History of Repair Regulations
  • Industries affected
  • Opportunities for missed deductions
  • Potential upcoming changes to the current Temp. Regs.

New Rules and Change

  • Plan of Rehabilitation Doctrine is Obsolete
  • How to define a Unit of property
  • 9 Building Systems defined in regulations
  • What is a Betterment?
  • Definition of Adaptation and Restoration
  • Retirement of Structural Components – MACRS Dispositions
  • Comparison test – what is the appropriate comparison?

Review of Examples Provided in the Regulations

  • Circumstances where the cost of a new roof membrane is considered an expense
  • Circumstances where replacing 2 out of 10 rooftop air conditioners may be considered an expense
  • Circumstances where replacing 3 out of 20 plumbing fixtures is considered an expense
  • Circumstances where the costs for a retailer to “refresh” their store is considered an expense
  • Circumstances where costs to replace 30 out of 300 windows is considered an expense

Educational Objectives

  • Understand the changes and new rules presented by the new repair regulations
  • Identify opportunities for missed deductions
  • Using the proper Accounting Methods for changes under the repair regulations

Prerequisite: None
Level: Intermediate to Advanced
Delivery method: Group Interactive live
Recommended CPE credit: 1.5 credits

Who Should Attend:

  • CFOs
  • CEOs
  • Comptrollers
  • Chief Accountants
  • Accounting Firms
  • Corporate Tax Officers
  • Tax Attorneys
  • Corporate Regulatory Officers 

Gian Pazzia, KBKG Cost Segregation

Gian Pazzia oversees all KBKG Cost Segregation operations nationally. He is also the subject matter expert for our 263(a) Repairs vs. Capitalization services. Gian is recognized among the cost segregation community as a leader in the field. He has been chair of the Technical Standards committee and held a seat on the Board of Directors for the American Society of Cost Segregation Professionals (www.ascsp.org). While serving as chair of the Technical Standards committee, he led the effort to write the first set of standards that all cost segregation reports must follow in order to be stamped by a Certified Member (MQS Report Requirements Appendix MQS 2011-1 Issued October 21, 2010). He led ASCSP’s effort to issue commentary on numerous issues including comments to the IRS on the newly issued “Repair Regulations” (December of 2011). He was also the lead author for ASCSP’s official commentary on the AmeriSouth XXXII., vs. Commissioner case; and the Peco Foods vs. Commissioner case. He has been published in various publications such as Accounting Today and the CPA Leadership Institute. He has been invited to speak to thousands of CPAs by some of the most prominent associations in the industry including the AICPA, California Society of CPAs, Oregon Society of CPAs, Washington Society of CPAs, Illinois Society of CPAs, Colorado Society of CPAs, Lorman Education, Denver University, Western CPE, and The CPA Law Forum.