Capitalization Regs Reproposed


Rather than finalize 18-month-old proposed regulations on capitalization of tangible assets, the Service withdrew the 2006 proposed regulations and reproposed them in revised form March 10. The regulations are intended to better distinguish between repair or maintenance on the one hand versus improvements and provide a standard for “betterment or restoration” of property. The new version preserved many elements from the 2006 release and followed the same general plan. However, it introduced several new rules that took their cue from public commentary on the earlier release, such as a $100 de minimis rule for material and supplies, as well as a safe harbor for routine maintenance. The new proposed regulations (REG-168745-03) also provide that property with an economic useful life of 12 months or less will be considered material or supplies, in harmony with depreciable asset rules of Treas. Reg. § 1.167(a)-1(b). Also, amounts paid to adapt property to a new or different use are now removed from the category of property improvements that materially increase the property’s value and are treated separately.

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100th ANNIVERSARY

Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.