Taxpayers Who Top Tangible Property Safe Harbor May Still Use Deductions

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Taxpayers who incur expenses on items greater than the $5,000 de minimis safe harbor included in final rules on tangible property accounting may still be able to deduct the costs of the items, an Internal Revenue Service official said.
The Service released long-awaited rules (T.D. 9636) Sept. 13 on how taxpayers can deduct or capitalize their expenses for maintaining, fixing and replacing tangible property. The rules affect major industries include manufacturing, oil and gas, mining, hospitality, retail, utilities and even banking.
The final rules included an expansion of the safe harbor rule up to $5,000, which would allow taxpayers to follow book treatment if they have financial statements and those statements allow assets up to that amount, on a per-asset or per-invoice basis (179 DTR GG-1, 9/16/13).
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