Q&A Session: Commencement Date for Implementation of the Final Treasury Regulations

I Need To Elucidate The Commencement Date For Implementation Of The Newly Released Final Treasury Regulations Governing Tangible Property. Can Someone Please Clarify This For Me?

Yes, it should be duly noted that while taxpayers have the option of applying the final treasury regulations governing tangible property back to tax years beginning on or after January 1, 2012, the final treasury regulations are generally effective for tax years beginning on or after January 1, 2014.

As a background, the final treasury regulations issued in September of 2013 replaces the temporary treasury 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 incurred for repair and maintenance purposes may be currently deducted under I.R.C. § 162(a) or must be capitalized under I.R.C. § 263(a).

Please let me know if I can be of further assistance to you on the scope and application of these final treasury regulations governing tangible property.

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