On September 13, 2013, The IRS took another crack at defining the treatment of tangible assets, whether acquired, produced or improved. This includes guidance on the deductibility of repairs and capital improvements.
The regulations affect all taxpayers that use tangible property in a business.
Following are a few of the interesting provisions:
1. The regs establish a $200 threshold for capitalization (items that cost less than $200 can be expensed),
2. You can elect to capitalize certain "rotable, temporary, or standby emergency" spare parts.
3. If you use the safe harbor deminimus rule ($200 discussed above), you must use that rule for all expenditures under $200.
4. Taxpayers may deduct the removal costs when removing a unit of property.
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