IRS Issues New Repair Regs

December 6, 2012 Written by

On Dec. 23, 2011, the Treasury Department issued the most comprehensive changes to the capitalization regulations in 20 years, withdrawing the 2008 proposed regulations on capitalization of tangible assets—the so-called “repair regs”—and proposing, for a third time in nearly five and a half years, new regulations designed to reduce uncertainty and controversy regarding section 263(a).

The new rul…es in the temporary regulations are generally effective for tax years beginning on or after Jan. 1, 2012. A Treasury official said at the end of October that transition rules in the form of two revenue procedures were due shortly, but no transition guidance was released with the temporary regulations. We expect that the additional guidance will be issued in the near future.

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Written by: Doug Rodrigues