Recent changes have given taxpayers three attractive options for taking deductions in the year property is placed in service, rather than having to depreciate the property over many years.
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TOPICS / TAX
Tax accounting
Electing the benefits of partial dispositions
A taxpayer could lose the benefits of a partial-disposition election if it fails to perform the required compliance.
Bonus depreciation applies to new class of property
December’s appropriations act created a “qualified improvement property” category for bonus depreciation.
New product or different presentation?
Courts and the IRS differ over a key qualification for the domestic production activities deduction.
IRS issues 2016 and revised 2015 vehicle depreciation limits
The IRS issued guidance providing the depreciation limits for automobiles for 2016 and revised limits for 2015 reflecting the retroactive increase in the amount of bonus depreciation permitted under recent legislation.
New Form 3115 is required, IRS announces
The IRS alerted the public that a new Form 3115, Application for Change in Accounting Method, has been issued with a revision date of December 2015, the first revision since 2009.
Tax implications of the new revenue recognition standard
Despite a delay in required implementation of the new standard, organizations need to get to work now analyzing its effects and evaluating tax methods.
Safe harbor for purchases of de minimis tangible property will be raised
The IRS announced that is raising the current de minimis limit for deducting expenses for purchases of items of tangible property from $500 to $2,500 for taxpayers without applicable financial statements.
Auto dealer stumbles on LIFO termination reversal
An initial change in inventory method is allowed despite a failed automatic consent attempt, but a change back to the original method is disallowed.
Sec. 179 and the repair regs.
Applying the two together may provide a larger overall deduction.
New safe harbor governs accounting for ratable service contracts
Qualifying accrual-basis taxpayers will be allowed to treat economic performance of certain service contracts as occurring on a ratable basis under a safe harbor introduced by the IRS.
Revised Form 3115 issued in draft form
The IRS has posted a draft revised version of Form 3115, Application for Change in Accounting Method, on its website.
New accounting method change procedures give more time to file Form 3115
The IRS updated its recently amended procedures for requesting approval for accounting method changes.
IRS asks for comments on accounting method changes for proposed revenue recognition standards
The IRS asked for comments on how taxpayers’ accounting methods should be affected by the new financial accounting revenue recognition standards that have been issued by FASB and the IASB.
Change is coming: Accounting method changes under the tangible property regulations
This article discusses the details of some of the accounting method changes businesses may need to make to comply with the tangible property regulations, popularly known as the “repair regulations.”
Small businesses won’t have to file Form 3115 to comply with repair regs.
Small business taxpayers will be allowed to make certain accounting method changes under the tangible property (or “repair”) regulations without filing Form 3115, Application for Change in Accounting Method, the IRS announced.
IRS updates accounting method change procedures
The new rules apply to automatic and nonautomatic accounting method changes and include a list of automatic changes that do not require IRS consent.
Accounting method change procedures for sales-based royalties and vendor allowances are announced
Taxpayers who are adopting the rules for sales-based royalties and vendor allowances under Sec. 263A and Sec. 471 provided in T.D. 9652 were given new procedures for obtaining automatic consent to accounting method changes to conform to those rules (which apply to tax years ending on or after Jan. 13,
Guidance on repair regs. updates accounting method change procedures
The IRS in late February issued the second part of guidance on accounting method changes under the so-called repair regulations, which govern the treatment of expenditures incurred in acquiring, producing, or improving tangible assets (Rev. Proc. 2014-17, modifying and superseding Rev. Proc. 2012-20). The first part of the updated procedures
Automatic consent for changing accounting methods under the “repair regs.”
The IRS recently issued Rev. Proc. 2014-16 describing the procedures to obtain automatic consent for changing to accounting methods required or permitted under the “repair” final regulations (T.D. 9636) and temporary regulations (T.D. 9564). The final regulations are effective for tax years beginning on or after Jan. 1, 2014, but
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