Introduction

The Department of Treasury finally issued their much awaited final treasury regulations governing the proper tax treatment for repair and maintenance expenditures on Friday, September 13^th. The final treasury regulations replace the temporary regulations previously issued in December of 2011. As with temporary treasury regulations, the final treasury regulations have the force and effect of law on both taxpayers and the government and any deviation from these treasury regulations will require the filing of Form 8275-R entitled “Regulation Disclosure Statement” for taking a position contrary to a treasury regulation in either temporary or final form. These final treasury regulations are meant to provide further clarity and reduce controversy over the determination of whether an expenditure may be currently deducted as a repair under I.R.C. § 162(a) or must be capitalized under I.R.C. § 263(a). While generally effective for tax years beginning on or after January 1, 2014, taxpayers have the option of applying the final treasury regulations to tax years beginning on or after January 1, 2012

A Practical Guide to the Scope and Application of the Final Treasury Regulations

The subsequent synopsis will serve as a practical guide to the scope and application of the final treasury Read More