February 19, 2015
Thomson Reuters Checkpoint Releases Special Report on Requesting Accounting Method Changes under the Tangible Property Regulations
NEW YORK — Thomson Reuters Checkpoint has released a special report, Requesting Accounting Method Changes under the Tangible Property Regulations. The report provides detailed guidance, practical tips and sample language for preparing Form 3115 on behalf of business clients.
In order to comply with the tangible property regulations and take advantage of many taxpayer-friendly provisions, businesses with tangible property, repairs and maintenance or materials and supplies may need to file Form 3115 to request an automatic accounting method change.
“Some of the favorable provisions in the final tangible property regulations are obtained by making an election on the tax return, while others require a change in accounting method,” said Sheila Owen, senior technical editor with the Tax & Accounting business of Thomson Reuters and author of the report. “Many taxpayers will have to receive consent from the IRS to change their accounting methods to comply with the final tangible property regulations.”
The final tangible property regulations, which generally apply to tax years beginning on or after 1/1/14, cover amounts paid to acquire, produce, or improve tangible property. In doing so, they provide criteria for determining the unit of property, which is the first step for determining whether expenditures to improve tangible property must be capitalized or can be currently expensed. The regulations also change the definition of and rules for accounting for materials and supplies.
For additional information on related tax guidelines, Thomson Reuters Checkpoint provides the following resources: PPC’s Practitioners Tax Action Bulletins and Checkpoint Learning Webinar: Form 3115 and the Capitalization Regulations: A Practical Approach.
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