Earlier this month, the IRS announced that it is delaying the effective date of the temporary regulations it issued in December 2011, in regards to whether property expenses could be deducted or had to be capitalized. The regulations originally applied to tax years beginning on or after Jan 1, 2012, but have now been amended to apply to tax years beginning on or after Jan 1, 2014. 

Although the applicability date has been extended, taxpayers may still choose to apply them to tax years beginning on or after Jan. 1, 2012. The following rules will also be revised to simplify the final regulations:

  • The de minimis rule in Temp. Regs. Sec. 1.263(a)-2T(g).
  • The rules for dispositions in Temp. Regs. Secs. 1.168(i)-1T and 1.168(i)-8T.
  • The safe-harbor rule for routine maintenance in Temp. Regs. Sec. 1.263(a)-3T(g).

Specifics on how these rules would be simplified have not yet been released by the IRS.

For more information, please visit the Journal of Accountancy.