IRS makes major change to tangible property regulations

Description

Abstract: The IRS’s 2013 release of its tangible property regulations explained how to distinguish between immediately deductible business expenses and capital expenditures that must be recovered over time through depreciation. The rules included a “de minimis” safe harbor that allows taxpayers to avoid capitalization of certain expenditures, thereby reducing their current-year taxable income. But the safe harbor imposed some restrictions that limited its value. This article summarizes IRS rule amendments that should allow more small businesses to immediately deduct more costs.