New Filing Requirements for Business by Tax Year 2014 

In September of 2013, the IRS issued regulations, required to be employed on tax year 2014 returns, that created guidelines for treatment of tangible property expenditures, whether tangible personal or real property. These new tangible property regulations (TPRs) provide guidance on the capitalization and depreciation of capital expenditures, the treatment of materials and supplies, and the opportunity to write off all or a portion of an asset when disposed of. They present new risks and opportunities that affect taxpayers in every industry that owns depreciable capital assets, spends funds on repairs and maintenance, and/or material and supplies. Below is a summary of the new regulations and how they will impact your business. 
 

Required Tax Filings

 
The good news of the TPRs is that taxpayers who have significant fixed assets with remaining depreciation or real property will typically have large current and future tax deductions. In order to obtain these tax deductions, a significant amount of “one time” work and related IRS tax filings need to occur, and occur by tax year 2014. This work relates to accounting method change forms. On the other hand, taxpayers who have been able to write their asset acquisitions off under bonus or Section 179 deductions will see minimal tax deductions but are still subject to the “one time” new tax filing requirements for 2014.
 
It is unfortunate that the IRS has required the majority of the TPRs to be implemented: (a) retroactively, and (b) via the filings of numerous additional required special tax forms for tax year 2014. Retroactive application of the TPRs requires taxpayers to revisit every asset on its depreciation schedule to see if it should have been capitalized under the new capitalization rules or criteria (see below). If a prior asset/expenditure does not qualify as an asset under the new principals, it must be written off by 2014, or the opportunity to write off that item by tax year 2014 will be lost. The scary part of the TPRs is the threat of the IRS to disallow any future depreciation for prior items that do not pass the new capitalization criteria.
 
Example, ABC, Inc. capitalized a $40,000 roof expenditure ten years ago. After applying the new criteria, it is determined that the remaining tax depreciation of $30,000 should be written off in 2014. If ABC does not properly complete the “one time” tax filings in their 2014 return, ABC will permanently lose $30,000 as a tax deduction. It is not allowed to continue to take annual depreciation for this item. Even if ABC did not have a tax deduction to take for tax 2014, ABC still has to file those numerous “one time” tax forms. Additionally, the IRS requires that the accounting method change forms not all be filed together. This could require several different sets of these forms to be filed.
 
The word “required” used above is very important to us as your tax return preparers. As CPAs and as your tax preparer, we are required to follow the rules and restrictions of our state and federal licensing parameters. Those parameters subject us to very large preparer’s penalties and sanctions, should we not follow them. One of those rules and regulations prohibits us from preparing and/or signing your 2014 return unless that return includes the new TPR implementation and form submissions.
 

Capital expenditures

 
Taxpayers and their accountants have always faced the challenge of differentiating between what are capital improvements or repair and maintenance expenses as they sought the balance between accurately reflecting business profits verses maximizing tax deductions. The new TPRs dictate that expenditures must be written off as repairs if they are not required to be capitalized. That is, repairs and maintenance are the opposite of what is required to be capitalized. Consequently, an understanding of the capitalization rules is imperative. Rule: a taxpayer must capitalize any amounts that are paid to improve a unit of property or assets purchased. One makes an improvement to a unit of property if it is deemed to be betterment, a restoration, or adaption to a new or different use. The employment of this guidance is heavily fact specific. While there are no bright line tests, there are now known specific criteria that need to be applied to the expenditures. The new criteria also require a thorough review of the past and future expenditures on improvements. That review will determine if prior capitalized expenditures should now be written off and will determine whether future ones will be capitalized.
 

Unit of Property

 
The foundation of the capitalization rules is in the comparison of the expenditure to the unit of property. A unit of property consists of a group of functionally interdependent components. In other words, if placing one component in service is dependent on placing another component in service, then they are functionally interdependent and considered one unit of property.
 
For example, a truck and its components (engine, tires, etc.) are one unit of property because each of those components needs to be placed in service at the same time in order for the truck to function. The regulations have special rules for buildings. In general, a building and its structural components are one unit of property.
 
Examples of the structural components would be roofs, walls, floors, ceilings and other items that relate to the operation of a building. There are also certain “building systems” that the regulations have defined as separate units of property. These building systems include HVAC system, plumbing, electrical, escalators, elevators, fire protection, alarm/security and gas distribution. Even though a building is one unit of property, the capitalization criteria must be applied at the building structure or system level, and then even smaller comparisons for any item that performs a material and specific function.
 

New Capitalization Criteria

 
Once a unit of property is defined, a taxpayer then needs to determine if the amounts paid result in a betterment, restoration or adaption to new/different use, as follows:
 
Betterment: Funds spent to correct a material defect/condition that existed prior to the acquisition of a unit of property; result in a material addition to the unit of property (i.e. enlargement, expansion or extension); and/or result in a material increase in capacity, productivity, efficiency, strength, quality or output of the unit of property.
 
Restoration: Funds spent to return the unit of property to its ordinarily efficient operating condition if the property was in disrepair and no longer functional; replacement of a component of a unit of property where a gain/loss is recognized on the component; rebuilding the unit of property to a like-new condition after the end of its class life; or the replacement of part(s) that comprise a major component, large physical portion, or substantial structural part of the unit of property.
 
New/Different Use: Funds spent to adapt a unit of property to a new or different use if the adaption is not consistent with the taxpayer’s original intended use of the unit of property when acquired.
 
Example: Able Contractors LLC purchased a bulldozer tractor in 2008. In 2014, it paid $20,000 to have the engine and transmission rebuilt and everything repainted. Under the new regulations, this cost would fall under the restoration category discussed above and would be required to be capitalized. The applicable class life for a contractor is 6 years and in this example the item was rebuilt to a like-new condition after the end of its class life. Let’s assume the same facts but the bulldozer was purchased in 2010. As the class life of the tractor (6 years) does not end until 2015, the expenditures could be deducted.
 

Routine Maintenance Safe Harbor

 
The IRS offered some opportunities in the regulations by acknowledging that taxpayers do incur expenditures that assist in keeping a unit of property in its efficient operating condition. As a result, the IRS created the Routine Maintenance Safe Harbor (RMSH) rule that allows taxpayers to expense certain costs that are routine and reoccur at specific times during the use of unit of property. For personal property, an activity is reoccurring if you expect to do it more than once during the applicable class life of the unit of property. The RMSH has special rules for buildings and their structural components. In the case of a building and/or its components, an expenditure can be treated as a repair & maintenance if one reasonably expect to perform it more than once over a 10 year period of time. 
 

De Minimis Safe Harbor to acquire property

 
When a taxpayer purchases a unit of property, generally capitalization is required; however, the IRS provided some relief under the TPRs by creating a De Minimis Safe Harbor (DMSH) exception. This exception allows taxpayers to immediately deduct amounts they pay to acquire or improve property, if the taxpayer complies with all of the DMSH rules. The DMSH rules can be applied by all taxpayers if the rules are met. First, one must have a capitalization policy in place before the tax year starts. This policy must specify that expenditures under a certain dollar amount (i.e. like $1,000 and under) are allowed to be expensed. Additionally, the taxpayer must have an invoice, and deduct the expenditure on its books. Under the regulations, taxpayers who have an applicable financial statement (AFS) are granted safe harbor to be able deduct up to $5,000 of the cost of an item of property (per invoice) or expenditure. For those who do not have an AFS, the $5,000 safe harbor is reduced to $500 per item. Although the regulations state the $5,000/$500 as safe harbor limits, the capitalization policy should be set to an appropriate level for your business. During an IRS audit, the taxpayer has the burden of proving to the IRS that the amount paid in excess of the safe harbor was reasonable. The DMSH is a safe harbor and not a restricted ceiling limitation.
 
Example: XYZ, Inc. does not have an AFS, has a written policy in place before tax year begins that states they will expense property that costs $500 or less. XYZ purchases 25 items that cost $400 each on a total invoice of $10,000. Since XYZ has a written policy in place and each item (unit of property) is $500 or less, XYZ must expense the full $10,000 paid if it writes these items off on its books.
 

Disposals

 
As another positive aspect of the TPRs, it also allows taxpayers the opportunity to partially dispose of duplicate portions of property, including buildings and their structural components. Historically, for example, if one replaced a roof on a building and capitalized the replacement costs the taxpayer was not allowed to dispose of the prior roof. Under the TPRs, a taxpayer can elect to dispose of the prior roof. These partial asset dispositions provide an opportunity to write 
off duplicable assets for tax years prior to 2014 and are only available through the filing of the 2014 tax returns.
 

Materials and Supplies

 
Materials and supplies (M & S) are defined as tangible property, excluding inventory, which is used or consumed in operations and is: either (a) A component acquired to maintain, repair or improve a unit of tangible property, (b) bulk, such as fuel, water, lubricants and similar items that are reasonably expected to be used in 12 months or less, (c) temporary or emergency spare parts, (d) units of property whose useful life is 12 months or less, or (e) a unit of property with a cost less than $200. Once an item is determined to be M & S, the regulations require a taxpayer to classify these M & S as either incidental or nonincidental. Incidental materials and supplies can be deducted when they are purchased. On the other hand, nonincidental materials and supplies are required to be deferred and deducted in the year they are used or consumed. No later than tax year 2014, taxpayers are required to defer and keep a physical inventory or a record of consumption for its nonincidental M & S. This rule is trumped, up to the taxpayer’s DMSH. Taxpayers must review and adapt its accounting by tax year 2014 to conform its treatment of M & S to the TPRs.
 
Example, Bob’s Wood Shop has temporary machine parts and bulk wood treatment on hand at tax year end 2014, that are above its DMSH. Bob’s has to defer, and not take as tax deduction in 2014, these items.
 

Conclusion

 
While the new regulations are complex, understanding how they impact your business is critical to maximizing tax deductions while maintaining tax compliance. Past decisions regarding the Maintenance & Supplies expenditures, as well as the capitalization or write off of R & M must be reviewed to determine what changes are necessary under the new regulations. These changes will require the filing of certain IRS tax forms no later than tax year 2014 while other changes are either new annual elections or choices. Stockman Kast Ryan and Company has the resources and expertise to assist you in determining how these new regulations will affect your business.

Uncertainty over expired tax provisions complicates year end tax planning

Now that the final quarter of 2014 has begun, many businesses and individuals are turning their attention to year end tax planning. This year, however, uncertainty over dozens of expired or expiring tax provisions complicates the planning process, particularly for business owners.

Fifty-seven provisions expired at the end of 2013 and six more are scheduled to expire at the end of 2014. Congress may extend many of these provisions (in some cases retroactively to the beginning of 2014), but that likely won’t happen until after the midterm elections on Nov. 4 — and perhaps not for a month or more after that date. In the meantime, there are many year end tax planning strategies for businesses and individuals that are available now. Others won’t take shape until after Congress acts.

Keep an eye on expired tax breaks

Year end tax planning for businesses often focuses on acquiring equipment, machinery, vehicles or other qualifying assets to take advantage of enhanced depreciation tax breaks. Unfortunately, the following breaks were among those that expired at the end of 2013:

Enhanced expensing election. Before 2014, Section 179 permitted businesses to immediately deduct, rather than depreciate, up to $500,000 in qualified new or used assets. The deduction was phased out, on a dollar-for-dollar basis, to the extent qualified asset purchases for the year exceeded $2 million. Because Congress failed to extend the enhanced election, these limits have dropped to only $25,000 and $200,000, respectively, for 2014.

Bonus depreciation. Also expiring at the end of 2013, this provision allowed businesses to claim an additional first-year depreciation deduction equal to 50% of qualified asset costs. Bonus depreciation generally was available for new (not used) tangible assets with a recovery period of 20 years or less, as well as for off-the-shelf software. Currently, it’s unavailable for 2014 (with limited exceptions).

Lawmakers are considering bills that would restore enhanced expensing and bonus depreciation retroactively to the beginning of 2014, but probably won’t take any action until late in the year. In the meantime, how should you handle qualified asset purchases?

  1. If you need equipment or other assets to run your business, you should acquire it regardless of the availability of tax breaks.
  2. For less urgent asset needs, consider spending up to $25,000, the amount you’ll be able to expense regardless of whether Congress extends the expired breaks.
  3. For additional planned asset purchases, consider taking a wait-and-see approach and be prepared to act quickly if and when “tax extenders” legislation is signed into law.

Keep in mind that, to take advantage of depreciation tax breaks on your 2014 tax return, you’ll need to place assets in service by the end of the year. Paying for them this year isn’t enough.

Other expired tax provisions to keep an eye on include the Work Opportunity credit, Empowerment Zone incentives, the health care coverage credit and a variety of energy-related tax breaks.

Revisit the research credit

Congress is likely to extend the research credit (also commonly referred to as the “research and development” or “research and experimentation” credit), as it has done repeatedly since the credit was first established in 1981. But regardless of whether the research credit is restored, it pays to investigate whether your business is eligible for the credit for previous tax years.

Even if you lack the documentation to support traditional research credits, you may qualify for the alternative simplified credit (ASC). Until recently, the ASC could be claimed only on a timely filed original tax return. But the IRS issued new regulations in June allowing most eligible businesses to claim missed credits for open tax years by filing an amended return.

Don’t overlook the manufacturers’ deduction

Many businesses miss out on significant tax savings because they fail to recognize that they’re eligible for the manufacturers’ deduction, also called the “Section 199” or “domestic production activities” deduction. It allows you to deduct up to 9% of your company’s income from “qualified production activities,” limited to 50% of W-2 wages paid by the taxpayer that are allocable to domestic production gross receipts.

Many business owners assume that the deduction is available only to manufacturers. But it’s also available for certain construction, engineering, architecture, software development and agricultural activities.

Consider traditional year end strategies

As always, consider traditional year end planning strategies, such as deferring income to 2015 and accelerating deductions into 2014. If your business uses the cash method of accounting, you may be able to defer income by delaying invoices until late in the year or accelerate deductions by paying certain expenses in advance.

If your business uses the accrual method of accounting, you may be able to defer the tax on certain advance payments you receive this year. You may also be able to deduct year end bonuses accrued in 2014 even if they aren’t paid until 2015 (provided they’re paid within 2½ months after the end of the tax year).

But deferring income and accelerating deductions isn’t the best strategy in all circumstances. If you expect your business’s marginal tax rate to be higher next year, you may be better off accelerating income into 2014 and deferring deductions to 2015. This strategy will increase your 2014 tax bill, but it can reduce your overall tax liability for the two-year period.

Finally, consider switching your tax accounting method from accrual to cash or vice versa if your business is eligible and doing so will lower your tax bill.

Implement strategies for individuals

Like businesses, individuals often can reduce their tax bills by deferring income and accelerating deductions. To defer income, for example, you might ask your employer to pay your year end bonus in early 2015. And to accelerate deductions, you might pay certain property taxes early or increase your IRA or qualified retirement plan contributions to the extent that they’ll be deductible. Such contributions also provide some planning flexibility because you can make 2014 contributions to IRAs, and certain other retirement plans, after the end of the year.

Remember that, when you use a credit card to pay expenses or make charitable contributions this year, you can deduct them on your 2014 return even if you don’t pay your bill until next year.

Other year end tax planning strategies to consider include:

Investment planning. If you’ve sold stocks or other investments at a gain this year — or plan to do so — consider offsetting those gains by selling some of your poorly performing investments at a loss.

Reducing capital gains is particularly important if you’re subject to the net investment income tax (NIIT), which applies to taxpayers with modified adjusted gross income (MAGI) over $200,000 ($250,000 for joint filers). The NIIT is an additional 3.8% tax on the lesser of 1) your net income from capital gains, dividends, taxable interest and certain other sources, or 2) the amount by which your MAGI exceeds the threshold.

In addition to reducing your net investment income by generating capital losses, you may have opportunities to bring your MAGI below the threshold by deferring income or accelerating deductions.

Charitable planning. If you plan to make charitable donations, consider donating highly appreciated stock or other assets rather than cash. This strategy is particularly effective if you own appreciated stock you’d like to sell but you don’t have any losses to offset the gains. Donating stock to charity allows you to dispose of the stock without triggering capital gains taxes, while still claiming a charitable deduction. Then you can take the cash you’d planned to donate and reinvest it in other securities.

Monitoring expired tax breaks. Keep an eye on Congress. If certain expired tax breaks are extended before the end of the year, you may have some last-minute planning opportunities. Expired provisions include tax-free IRA distributions to charity for taxpayers age 70½ and older, the deduction for state and local sales taxes, the above-the-line deduction for qualified tuition and related expenses, and the credit for energy efficient appliances.

Start now

Most strategies for reducing your 2014 tax bill must be implemented by the end of the year, so it’s a good idea to start planning now. Uncertainty surrounding the fate of expired tax breaks complicates matters, so contact us today to develop contingency plans for dealing with whatever tax legislation is signed into law.

Did you know that Colorado businesses, including banks, financial institutions and business entities of all types, are required to file reports and turn over unclaimed property when the business holds unclaimed property of customers, employees and others?

Colorado’s reporting requirements for the November 1, 2014 deadline

For all businesses and governmental agencies that are holders of unclaimed property, a Report of Unclaimed Property is due to the Colorado Department of Treasury on November 1, 2014, for the reporting period July 1, 2013 through June 30, 2014. The only exception to this reporting period is for life insurance companies that must report on a calendar year reporting period. If your business does not hold unclaimed property during a particular reporting year, no report is required. However, some businesses may choose to file a report even if no report is required, so that the statute of limitations doesn’t remain open.

With the Report of Unclaimed Property, businesses are required to report unclaimed property which was presumed abandoned during the previous 5-year period. For the report due on November 1, 2014, businesses will report property that was presumed to be abandoned during the period July 1, 2009 through June 30, 2014. Along with the report, businesses must also forward or remit unclaimed property to the State Treasurer. The State Treasurer then acts as the custodian and steward of the property until it is claimed by its rightful owner.

What is unclaimed property?

If the term unclaimed property is new to you, here are some facts about unclaimed property:  Unclaimed property is generally intangible property held by a business that has remained dormant or unclaimed by the rightful owner of the property for a period of 5 years from the last customer-initiated contact, generally. The dormancy period for payroll, wages and salary checks is one year. An IRA account becomes unclaimed property three years after the distribution date (when the owner becomes 72 and ½ years old) in most cases.

Common examples of unclaimed property include:

Checking and Savings Accounts Utility Refunds Stocks and Bonds
Oil and Gas Royalty Payments Safety Deposit Boxes Uncashed Insurance Checks
Payroll Checks Mutual Funds Money Orders
Gift Cards and Certificates Uncashed Dividends Security Deposits
Uncashed Checks Customer Refund Checks Credit Balances

 

Special considerations

All items of unclaimed property must be reported. However, like kind items with a value of less than $25 each may be reported in the aggregate. For some types of property, the holder can retain 2% or $25, whichever is more. However, this retainage is not applicable to property reported in the aggregate.

Small businesses with annual gross receipts of less than $500,000 do not need to file a Report of Unclaimed Property until the aggregated amount of unclaimed property exceeds $3,500 or any single item is $250 or more. All other businesses most report annually unless they have no unclaimed property for the year. Businesses must maintain records related to unclaimed property reporting for five years from the due date of the report. Failure to file and remit unclaimed property may result in penalties and interest.

How to notify owners and report unclaimed property

Businesses holding unclaimed property in the amount of $50 or more must send written notice to the owner’s last known address stating that property is being held and may be turned over to the State Treasury. This notice must be sent not more than 120 days before filing the unclaimed property report.

All 50 states have unclaimed property laws. You should report unclaimed property to the state of last known address of the owner. If your records do not include a state of last known address for unclaimed property, you should report to your company’s state of incorporation or to the state of domicile if the business is not incorporated.

The Colorado Treasury encourages electronic reporting of unclaimed property. Following is a link to a page that includes instructions to obtain software for unclaimed property reporting. http://www.colorado.gov/treasury/gcp/holderrep.html

Below are links to the Unclaimed Property Reporting Forms for Colorado:

http://www.colorado.gov/treasury/gcp/images/FormA.pdf

http://www.colorado.gov/treasury/gcp/images/FormB.pdf

If your business has unclaimed property, be aware that a failure to file and remit unclaimed property may result in penalties and interest. And keep in mind that your business must maintain records related to unclaimed property reporting for five years from the due date of the report.

For more information regarding unclaimed property, please give us a call at (719) 630-1186 or consult detailed information on the Colorado Treasury website at http://www.colorado.gov/treasury/gcp/

Since many of our clients use a vehicle for both business and personal use, we thought a refresher on this topic would be useful as we approach year-end. It is quite acceptable to use a vehicle for both business and personal use but important to understand the deductibility of expenses associated with the vehicle.

Business use is determined by the number of miles traveled between two business locations. The business use percentage is simply the ratio of total business miles for the year to total miles for the year for the vehicle. As a reminder, commuting miles to and from your normal place of business are not considered to be business miles.

When you use a vehicle for business purposes, the business portion of depreciation and ordinary and necessary vehicle operating expenses are deductible. The tax regulations provide two methods for calculating the business portion of vehicle expenses which can be used by self-employed taxpayers and employees:

(1) the deduction may be computed using the standard mileage rate for the number of business miles driven during the year, or

(2) the business portion of actual vehicle expenses, including depreciation and the Section 179 deduction, may be deducted.

Standard Mileage Rate Method:

The standard mileage rate varies from year to year and is computed by the IRS to represent the cost of fuel, oil, insurance, repairs and maintenance and depreciation or lease payments for the vehicle. The standard mileage rate method is available regardless of the cost of the vehicle. For 2014, the standard mileage rate is $.56 per mile.

In addition to the standard mileage rate, the costs of business-related parking and tolls are 100 percent deductible. The standard mileage rate can only be used if this method was used to compute the business auto deduction for the first year the vehicle was placed in service and each subsequent year. If the standard mileage rate is used to calculate the vehicle expense deduction for a vehicle, straight-line depreciation must be used if there is a subsequent switch to the actual expense method.

Actual Expenses Method:

To use the actual expense method, first determine the entire cost of operating the vehicle for the year, including vehicle depreciation and Section 179 expense, if any.

Taxpayers who use a vehicle more than 50% of the time for a qualified business use can deduct Section 179 expense and/or MACRS accelerated and bonus depreciation, as well as other ordinary and necessary expenses. If the vehicle is used less than 50% for qualified business use, straight line depreciation over a 5-year life must be used to compute depreciation on the vehicle and the Section 179 deduction is not available for the vehicle.

The above rules are subject to the limitations on luxury vehicles. Certain trucks, vans and sports utility vehicles with a gross loaded vehicle weight rating exceeding 6,000 pounds  are not subject to the luxury auto depreciation limits.*** However, vehicles with a weight rating of 6,000 pounds or less are considered passenger autos and are subject to the luxury vehicle limitations.

To satisfy the more than 50% qualified business use test, only use in a trade or business can be considered. Investment use and other use in other activities conducted for the production of income are not included in the qualified business use test, although total business and investment use can be used for determining the deductible portion of vehicle expenses.

If qualified business use falls below 50% in subsequent years, then depreciation and Section 179 deductions in excess of the straight-line method and deducted in previous years must be recaptured in the year that qualified business use falls below 50%.

Of course, we recommend that you keep excellent vehicle expense documentation and contemporaneous usage records. We have included a vehicle mileage log (see side bar) that we recommend you keep to corroborate auto usage documentation from repair and maintenance records.

If you have questions regarding the information in this article or if you’re interested in special tax deductions related to the purchase of a truck, van or sports utility vehicle in 2014, please give a member of the SKR staff a call to learn more.

 
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SKR+Co Alert: Revised capitalization policy and updated IRS final tangible property (“repair”) regulations

To say that this issue is complicated is an understatement. In our ongoing analysis of this issue, we discovered some inconsistencies. We recommend you use this information and the linked capitalization policy sample in place of earlier information and samples.

Take action now! Final tangible property ("repair") regulations require written policy by January 1, 2014

As we shared in an October Tax Alert and in our recent tax seminar, the IRS has issued final regulations which govern the capitalization of materials and supplies, amounts paid to acquire or produce tangible property, and expenditures relating to the betterment, adaptation, and restoration of tangible property.  One part of the regulations – the De Minimis Expensing Rule – requires taxpayers to have a written policy in place at the beginning of the taxable year to be able to expense amounts paid for:
 

  • Property costing $5,000 or less per item/invoice, if there is an applicable financial statement, or
  • Property costing $500 or less per item/invoice, if there is no applicable financial statement. 

 
Taxpayers may also expense amounts paid for property with an economic useful life of 12 months or less provided the amount per item/invoice does not exceed $5,000 (with an applicable financial statement) or $500 (without an applicable financial statement).   
 
Additionally, the taxpayer must treat the amount paid for the property as an expense on its books and records in accordance with the company’s written book capitalization policy.  
 
To help you take advantage of the new rules, we recommend you prepare a written Book Capitalization Policy before January 1, 2014.  A sample written policy can be accessed here.    
 

Next Tax Seminar:

Tuesday, January 21st
 3:00 – 4:30 p.m.

TOPIC:


Implications of the Final 3.8% Net Investment Income Tax – 
 
 
Understand how this tax will affect your real estate investments

WHO SHOULD COME:

This seminar is for Real Estate Professionals, who are individuals working in a designated real estate activity, as well as Investors with real estate holdings, and Businesses renting property from the owners of the business. The seminar will focus on strategies to minimize the additional tax effective for 2013 tax returns.

PRESENTERS:


Judy Kaltenbacher, CPA, Tax Partner in Charge


Jordan Empey, CPA, Tax Manager

Have questions? Contact us: (719) 630-1186 or Click Here
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SKR+Co Tax Alert: Big changes for businesses owning tangible property 

The IRS has released its final regulations on the tax treatment of expenditures related to tangible property. The regulations provide guidance on how to comply with Sections 162 and 263 of the Internal Revenue Code, which require the capitalization of amounts paid to acquire, produce or improve tangible property but allow amounts for incidental repairs and maintenance of property to be deducted.

This article examines the final regulations, which primarily focus on how taxpayers determine whether expenditures are for deductible repairs or capital improvements. 

If you have expenditures related to tangible property, the final regulations apply to you. Compliance may require changes to your current capitalization procedures and the filing of Form 3115, “Application for Change in Accounting Method.”

This is a complicated topic. If after reading the article you have questions about how this applies to you, please contact us.

Read the Full Article Here.

What is tangible property?
 
These regulations affect all businesses that own or lease tangible property, which includes buildings, machinery, equipment, office furniture, tools, and vehicles. 
 

 

Assurance Services:
 

What are they and why would a business need them?

 

When providing business information to third party users, the decision makers using that information must have confidence that it is reliable. Their confidence in financial information can be increased through assurance services.

The AICPA Assurance Services Executive Committee has published a white paper for providers and users of business information on the qualities of the types of assurances 

services and the factors that should be considered in choosing a quality assurance provider.
 

 

At Stockman Kast Ryan & Company, we have extensive experience in providing the entire range of assurance services. We are happy to answer any questions you might have.

Have questions? Contact us: (719) 630-1186 or Click Here
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