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.

PODCAST

What’s next for potential CPA licensure changes

A new model proposed by NASBA and the AICPA is designed with an eye on the future for newly licensed CPAs. The AICPA's Carl Mayes, CPA, provides background on the project and a look ahead to 2020.

VIDEO

What RPA is and how it works

Robotic process automation is like an Excel macro that can work on multiple applications, says Danielle Supkis Cheek, CPA. RPA can complete routine, repetitive tasks such as data entry, freeing up employee time from lower-level chores.