Final Rules on Tangible Property Accounting Expand Safe Harbor

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The IRS releases long-awaited final rules (T.D. 9636) on how taxpayers can deduct or capitalize their expenses for maintaining, fixing and replacing tangible property, making key changes and winning measured praise from practitioners. The rules expand a de minimis safe harbor for expensing certain costs and extend a routine maintenance safe harbor so that it applies to buildings. IRS also reproposes rules with what practitioners say is favorable treatment of taxpayers disposing of property. “There are a lot of great, very taxpayer-favorable changes,” Brandon Carlton, a principal with EY's National Tax Quantitative Services group in Washington, tells Bloomberg BNA. “The IRS focused on simplicity and administrability for taxpayers.”


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