Tangible Property Regulations - Understanding the Unit of Property
11/26/2014 12:00 PM - 2:00 PM Website
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The 'Unit of Property' Is the Key in Your Repairs versus Capitalization Decision under the New Final Tangible Property Regs
With the recent release of the final tangible property regulations ("TPRs" or "repair regs") by the IRS, taxpayers and their advisors have struggled to understand the rules for determining exactly what is a unit of property (UOP). The UOP rules interact with other parts of the regs, such as the capitalization criteria of the restoration, adaptation, betterment or improvement (RABI) rules that are critical to deciding whether an expenditure should be capitalized or expensed. Making UOP determinations are often difficult, such as for complicated buildings like shopping malls, manufacturing plant production lines, when leased property is involved, and many other situations. Properly stating to the IRS what is a UOP could allow for deduction of more expenditures than what would otherwise be possible. Time is running short as UOP statements must be made to the IRS in a change of tax accounting method for the 2014 tax year.
In this timely class, nationally known tax accounting expert Eric P. Wallace, CPA of Boyer & Ritter, CPAs will explain what the TPR regs mean and how to handle unit of property determinations through the use of practical examples and "what-if" scenarios that will allow you to better grasp the problems and opportunities the UOP rules present. Wallace will cut through the confusion and emphasize what your business or your clients must do now.
Speaker: Eric P. Wallace
Program Topics
- Why UOP is key for application of the R.A.B.I. criteria (restoration, adaption, betterment, improvement) in the determination of whether an expenditure should or should not be capitalized
- Unit of Property for:
- Buildings
- "Complicated" buildings such as shopping malls
- Land improvements
- Tangible property other than buildings
- Plant (i.e., manufacturing)
- Lessor tenant improvements
- Leased property by lessees
- Subsequent improvements to lease property
- Why taxpayers must make UOP statements or declarations to the IRS in a method filing by 2014
- What details need to be in your UOP statement(s) or declaration(s) to the IRS
- What are the consequences if a taxpayer does not make a UOP declaration for its buildings, land improvements
- How properly worded UOP statements can enable a taxpayer to deduct more expenditures than it might not otherwise
- What form does the taxpayer submit to the IRS to make the UOP declarations
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