Tangible Property Regulations

This small taxpayer safe harbor (STSH) under §1.263(a) – 3(h), is an overlooked and misunderstood tax saving opportunity which allows many repairs that would normally be depreciated in the current tax year, to now be expensed.

Passed in 2013, the Final Tangibles Property Regulations apply to all taxpayers who own tangible property. Tangible property is described as anything that can be touched, includes both real and personal property, and is the opposite of intangible property.

One of the safe harbors is called the de minimis safe harbor (DMSH), and it was designed for small expenditures, helping not only the Service but also the taxpayer.

When a taxpayer disposes of a portion of an asset, in this case, a building, the trash from the old building sections can be expensed. You read that right.

Changing your method of accounting under the Internal Revenue Code often involves altering how you handle specific expenditures.

The Tangible Property Regulations (TPRs), enacted in 2013, set the rules for determining whether changes, improvements, renovations, repairs, and maintenance performed on any asset after it’s put in service should be depreciated or expensed.

The Tangible Property Regulations (TPRs), made mandatory in 2014, represent one of the most significant changes in tax law since 1986.