Press Room: Tax Release

August 19, 2013

Tangible Property Regulations Create Tax Planning Opportunities

Are you ready? Your WTAS client service team is.

The much anticipated final tangible property regulations are due any day. The most recent communications from the Treasury Department point to a late August release date.

What does this mean to you?

All taxpayers with tangible personal property will need to review their specific tax situations.

Major topics associated with the regulations include:

  • Treatment of acquisition costs
  • Repair and maintenance costs
  • Dispositions and related treatment
  • Expensing of supplies

Expected effective date is calendar year 2014 or years beginning after the date the regulations are released.

Questions to Consider:

  • What elections and methods are optimal for your current tax position?
  • Are there opportunities to simplify your current fixed asset accounting?
  • Is your capitalization policy documented and strictly followed?
  • Section 481(a) adjustments will be required by most companies to comply with new standards. Do you have the necessary data available to estimate your change?
  • What impact will this have on 2013 financial reporting under ASC 740? You may need to address this in the current quarter. 
  • What impact will this have on state tax depreciation?

These questions cannot wait until the end of the year. Testing, tracking and sampling will need to be in place at the beginning of the year.