Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

IRS Publishes New Regulations for Deductible Business Repairs

Author: Scarinci Hollenbeck, LLC

Date: October 4, 2013

Key Contacts

Back

The Internal Revenue Service released a new set of guidelines governing tax-deductible business repairs, which may finally put an end to disputes and challenges between the federal tax agency and companies.

The new rules, which broaden the scope of business expenditures that may qualify as deductible asset repairs, may help limit the number of corporate tax audits the agency takes on each year, especially as it seeks to operate within a tightened budget. The regulations may also help companies reduce their liability, as they may now deduct costs that were previously prohibited under the law. The final guidelines, which replace temporary rules that have been in place since December 2011, will affect all taxpayers who acquire, produce, or improve tangible property.

The IRS raised many dollar-amount thresholds, including the previous $100 threshold for property that is exempt from capitalization to $200. The agency also changed the treatment of additional costs of acquiring property subject to the safe harbor to include additional invoice costs, such as delivery fees. The final rules simplify the de minimis safe harbor by requiring that all materials and supplies be included if taxpayers elect to use the safe-harbor method. The IRS will also allow business owners with gross receipts of $10 million or less to elect to deduct, for buildings that initially cost $1 million or less, the lesser of $10,000 or 2 percent of the adjusted basis of the property for repairs.

The IRS has been working on these tangible property repair regulations since 2004, and the updated version of the tax law will go into effect on January 1, 2014. As the rules – which are outlined in a 220-page document – are final and quite expansive, business owners should consider contacting a legal or tax professional to learn more about their options and obligations under the new guidelines.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Tariff Response Options for Small Businesses Facing Financial Distress post image

Tariff Response Options for Small Businesses Facing Financial Distress

The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]

Author: Brian D. Spector

Link to post with title - "Tariff Response Options for Small Businesses Facing Financial Distress"
Common Causes of Partnership Disputes and How to Resolve Them post image

Common Causes of Partnership Disputes and How to Resolve Them

Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]

Author: Christopher D. Warren

Link to post with title - "Common Causes of Partnership Disputes and How to Resolve Them"
President Trump's Termination of Member Gwynne Wilcox post image

President Trump's Termination of Member Gwynne Wilcox

On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]

Author: Matthew F. Mimnaugh

Link to post with title - "President Trump's Termination of Member Gwynne Wilcox"
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide post image

How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide

Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]

Author: Christopher D. Warren

Link to post with title - "How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!