Deconstructing the Tangible Property Temporary Regulations
Understand how the new guidance may affect your company
The Treasury Department and the Internal Revenue Service recently issued temporary regulations (T.D. 9564) (“the Temporary Regulations”) that provide guidance with respect to the treatment of materials and supplies, dispositions of MACRS property, capitalization of amounts paid to acquire or produce tangible property, and the determination of whether an expenditure with respect to tangible property is a deductible repair or must be capitalized. The Temporary Regulations address a broad range of capitalization and deduction issues for expenditures related to tangible property and may likely impact taxpayers in all industries.
The Temporary Regulations are generally effective for taxable years beginning on or after January 1, 2012. Changes to comply with or adopt the provisions in the Temporary Regulations generally will be made through an accounting method change. Rev. Proc. 2012-19 and Rev. Proc. 2012-20 provide guidance on implementing the Temporary Regulations.
Download the PDF attachment containing a summary that provides an overview of the guidance along with a chart that highlights specific aspects of the accounting method change procedures set forth in Rev. Proc. 2012-19 and Rev. Proc. 2012-20.