Tangible Property Regulations Review

Reduce tax liability and improve cash flow by properly classifying expenditures.

Businesses should evaluate whether their current methods of accounting for tangible property comply with the most recent IRS regulations. A tangible property review by CLA can help.

The tangible property regulations include guidance to the following areas:

  • Repairs and maintenance to tangible property
  • Determination of the “unit of property”
  • Incidental materials and supplies
  • Depreciation and dispositions
  • General asset account elections

If an adjustment is required on historical assets, it must be made with an accounting method change in the current tax year (no need to amend prior year returns).

What is a tangible property review?

Determining whether an expenditure is a deductible repair versus a capitalized improvement has always been unclear, leading to much controversy between taxpayers and the IRS. If an expenditure is determined to be a deductible item (supply or repair) under the regulations, we can apply these regulations to historical assets, deduct those that were capitalized in prior years in the current year, and help you comply with the regulations for current year expenditures.

Consultation on a comprehensive capitalization policy

Many companies do not have a comprehensive capitalization policy for financial and tax reporting. Our professionals can help draft a policy that allows for full utilization of tax benefits and compliance.

Get a complimentary assessment

Properly classifying expenses can save thousands of tax dollars and increase your cash flow.

We will evaluate your potential project before work begins and provide an honest assessment of whether a tangible property review is cost effective for your business. This assessment is at no cost to you.

How we can help

CLA’s tax professionals have significant experience classifying business costs for companies such as yours. Our clients have realized additional tax deductions and positive cash flows from our reviews.