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Mackay: Guidance on Final Tangible Property Disposition Rules Expected Late February

Tuesday, February 11, 2014

By Lydia Beyoud

Feb. 10 — A revenue procedure providing changes to the early application of proposed disposition of tangible property rules (REG-110732-13) should be out by the end of February, a Treasury Department official said.

The Internal Revenue Service issued reproposed tangible property disposition rules in September to accompany final rules (T.D. 9636) on how taxpayers may deduct or capitalize their expenses for maintaining, fixing and replacing tangible property.

The forthcoming Revenue Procedure 2014-17 “will not look quite as simplified, for lack of a better term, as 2014-16,” said Scott Mackay, a tax specialist in the Office of Tax Policy, referring to guidance issued Jan. 24 on early adoption of the final “repair regulations”. Mackay spoke Feb. 10 during a Deloitte LLP Dbriefs Federal Tax series webinar.

Though the regulatory drafters looked for areas to simplify compliance, “unfortunately, this one has a lot of coordination built into it,” Mackay said. The guidance will explain what taxpayers who have already made changes based on the temporary regulations will have to do to conform with the reproposed rules, he said.

“Because it incorporates temporary reg changes as well we've built it so that ultimately, when we release the final rules, we can drop out the reproposed and you'll still have the ability to use the temp reg regime for your 2013 year,” Mackay said.

The final regulatory package could be issued in late April or early May, with an update to Rev. Proc. 2014-17 likely “shortly thereafter,” Mackay said. “We don't expect to make a lot of substantive changes,” with the update consisting primarily of a citation update providing certain clarifications, he said.

To contact the reporter on this story: Lydia Beyoud in Washington at lbeyoud@bna.com

To contact the editor responsible for this story: Cheryl Saenz at csaenz@bna.com

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