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ARTICLE · 08 APRIL 2013

To Deduct Or Not To Deduct…

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In December, 2011, the IRS issued temporary regulations intended to set new standards for capitalizing or deducting dollars spent on tangible property.

United StatesReal Estate and Construction
Anita Wescott
Anita Wescott
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In December, 2011, the IRS issued temporary regulations intended to set new standards for capitalizing or deducting dollars spent on tangible property. These regulations were originally effective for years beginning on or after January 1, 2012, but the effective date has been postponed to tax years beginning on or after January 1, 2014. Taxpayers have the option to apply the temporary regulations to tax years beginning on or after January 1, 2012.

Consistent with prior regulations, the new regulations center on a "unit of property." A "unit of property" is determined by the functional interdependence standard. Guidelines of particular interest for those involved in real estate include the following:

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