Resources for TPR

Tangible Property Regulations

Resource Page

In order to help you shorten the learning curve in understanding the Tangible Property Regulations, we have assembled links to the best, most concise, explanations of the regulations.  The links are placed in order of complexity to discuss a broad understanding of the regulations to deep analysis through understanding of the most asked questions. 

Links to the Federal Register Examples are also provided.

CSSI has tax counsel that can also assist you with your specific TPR questions and Asset Valuation services to ease the burden of claiming disposition for your client’s past retired assets.

Quick Summary Chart of Final Tangible Property Regulations -   AICPA

This is the most concise summary of the regulations in the industry.  Six pages in bullet form.  You will want to print this and keep it as a document to refer to when reading other articles.

If you only look at one, this is the one to look at. “5 Stars” *****

http://www.aicpa.org/InterestAreas/Tax/Resources/TaxMethodsPeriods/ToolsandAids/DownloadableDocuments/Quick%20Summary%20Chart%20of%20Final%20Tangible%20Property%20Regulations.pdf

AICPA Tangible Property Regulations:  Questions and Answers.  December 17, 2013

32 Questions to guide you through the regulations

For Tax Professionals that are just starting their research. 

“5 Stars”*****

http://www.aicpa.org/InterestAreas/Tax/Resources/TaxMethodsPeriods/Pages/TangiblePropertyRegsQuestionandAnswer.aspx

IRS Releases Comprehensive Repair/Capitalization Final Regulations     Sept 20, 2013        CCH Tax Briefing

This is a great article to start your research that compares the Temporary and Final Regulations in plain English in 11 pages.    

“5 stars”*****

http://tax.cchgroup.com/downloads/files/pdfs/legislation/repair-capitalization-regulations.pdf

OMG! You just found out that your client needs a Capitalization Policy in place starting January 1st to be eligible for the De minimis Rule Safe Harbor. 

Don’t Panic.  Here is a template to get it done.

Download the Fill in the Blank template from the AICPA for creating a Written Capitalization Policy to comply with the De minimis Rule.  This document is priceless if your client does not have this in place already. Look under Tools.    “5 stars”*****

http://www.aicpa.org/InterestAreas/Tax/Resources/TaxMethodsPeriods/Pages/TangibleProperty.aspx

Advanced Studies    Questions and Answers Sources

Great questions for real situations that you may need to know for your client’s tax situation. 

Provides understanding of applying the regulations.   “4.5 Stars”

Commonly Asked Questions

http://www.kpmg.com/US/en/IssuesAndInsights/ArticlesPublications/Documents/faq-repair-regs.pdf

Commonly Asked Questions

http://mcgladrey.com/content/dam/mcgladrey/pdf/wc_capitol_hill_insights_tars_questions_answers.pdf

In depth analysis of the regulations in 3 parts.

Part 1   Favorable changes to materials and supplies and de minimis safe harbors http://mcgladrey.com/content/dam/mcgladrey/pdf/wp_final_tars.pdf

Part 2   Clarification and taxpayer-friendly safe harbors and elections added for acquisition and improvement rules.   

http://mcgladrey.com/content/dam/mcgladrey/pdf/wp_final_tars2.pdf

Part 3   General Improvement Rules

http://mcgladrey.com/content/dam/mcgladrey/pdf/wp_final_tangible_propert_iii.pdf

Federal Register Links within the Regulations

 Guidance Regarding Deduction and Capitalization of Expenditures related to Tangible Property

Click here to Access the Table of Contents

https://www.federalregister.gov/articles/2013/09/19/2013-21756/guidance-regarding-deduction-and-capitalization-of-expenditures-related-to-tangible tangible -property#table_of_contents

Materials and Supplies

https://www.federalregister.gov/articles/2013/09/19/2013-21756/guidance-regarding-deduction-and-capitalization-of-expenditures-related-to-tangible-property#h-69

De minimis Safe Harbor Examples

https://www.federalregister.gov/articles/2013/09/19/2013-21756/guidance-regarding-deduction-and-capitalization-of-expenditures-related-to-tangible-property#h-89

Routine Maintenance Examples

https://www.federalregister.gov/articles/2013/09/19/2013-21756/guidance-regarding-deduction-and-capitalization-of-expenditures-related-to-tangible-property#h-160

Improvement Standards

Betterment Examples

https://www.federalregister.gov/articles/2013/09/19/2013-21756/guidance-regarding-deduction-and-capitalization-of-expenditures-related-to-tangible-property#h-175

Restoration Examples

https://www.federalregister.gov/articles/2013/09/19/2013-21756/guidance-regarding-deduction-and-capitalization-of-expenditures-related-to-tangible-property#h-198

Adaptation Examples

https://www.federalregister.gov/articles/2013/09/19/2013-21756/guidance-regarding-deduction-and-capitalization-of-expenditures-related-to-tangible-property#h-229

An analysis of the Final Repair Regulations    Tax Practice

“4 Stars”****

https://www.kpmg.com/US/en/IssuesAndInsights/ArticlesPublications/Documents/repair-regs-tax-notes-2013.pdf

Repairs vs. Capital Improvements: Do the Final Regulations at Last Clarify the Distinction?  Journal of Taxation  November 2013

http://www.kpmg.com/US/en/IssuesAndInsights/ArticlesPublications/Documents/repair-v-capital.pdf

Final Tangible property repair regulations and proposed regulations WNTS Insights   October 2013 

 A plain- english document to explain the regulations. 4 Stars****

http://www.pwc.com/en_US/us/washington-national-tax/newsletters/wnts/assets/pwc-final-repair-regulations-part-3-revised.pdf

Temporary Regulations

Accounting Method Changes Under the Temporary Tangible Property Regulations   AICPA

 Good summary of Rev Proc 2012-19 2012-20 to comply with the Temporary Regulations.  “4 Stars”****

http://www.aicpa.org/publications/taxadviser/2013/january/pages/rohrs-tucker.aspx

We found the best eBook on Tangible Asset Regulations

We’ve spent a lot of time looking thru all the Tangible Asset Regulations info on the Web so you don’t have to.  We think this EBook is the “best of the best” overview of the regs. 

CCH has released a special Tax Briefing: "Final Regs Governing Repairs and Capitalization make Significant Changes" to help professionals interpret and apply these often complex regulations that affect all businesses in one way or another.

If you have had a renovation in your past, turn your renovation debris into dollar for the 2013 and 2014 tax years. 

Click here to get your free copy of Comprehensive Repair/Capitalization Regulation.

CCH is a leading global provider of tax, accounting and audit information, software and services (CCHGroup.com)

Engineer Finds $331,000 in Demolition Debris

Temporary Tangible Property Regs are turning dumpsters of demolition debris into mounds of Tax Deductions.

What's in your dumpster?

CSSI is leading the nation in educating and strategizing with Tax Professionals to do the hard work of calculating and valuing the depreciation deductions of building components that were removed and thrown in the dumpster in past years.

The IRS has given little direction on how to get this done other than cost segregation is an acceptable method.  At CSSI, we already have an Asset Valuation Strategy in place to work with you and your clients to meet the Tangible Asset Regs Disposition.

CSSI actually performed its first Asset Valuation Study early last year to help a client and CPA take advantage of the coming Tangible Property Regs.

The client hired CSSI to conduct a Cost Segregation Study on a 40 year old high-rise office building purchased five years ago. 

In surveying the building and follow up discussions with the owner, CSSI discovered that the 40 year old fresh water piping system had to be removed last year due to major leakage and fear of catastrophic rupture. 

There was significant removal of walls and flooring to facilitate the access the old piping system and install new copper piping and supporting pumps.  The final cost was around $2.4 million.

In addition to the savings generated from the traditional Cost Segregation Study, the value of the old piping was calculated to be around $920,000 in net taxable depreciable value to write down.

At a 36% tax rate, it resulted in $331,000 savings resulting from the disposition to apply to the client's 2012 return.

CSSI supplied a complete report to the CPA with all the necessary documentation.  CSSI can also assist Tax Professionals with the completion of the 3115 forms to make it a turn-key project.   

“What did it cost?” 

After taxes, the client received a 32:1 return on his investment in the Cost Segregation and additional Asset Valuation Study. 

It was CSSI that brought these new deductions to everyone’s attention and provided the expertise to identify and value existing and removed building components and produce an IRS defined engineering-based Cost Segregation and Asset Valuation Studies for Tax Professionals to apply. 

CSSI provides the "know what" and the "know how" to meet the Tangible Asset Regs for Disposition.

CSSI provides a proven methodology to turn a complex calculation into a simple process for Tax Professionals and a great opportunity to reduce taxes for the client.

“Going over the fiscal cliff is not so bad when you are wearing a parachute.”  Surprise your clients with unexpected windfall to cushion the landing.  


Contact your local CSSI rep for a free consultation or to receive a no-cost preliminary analysis illustrating the estimated tax savings and increased cash flow from an Asset Valuation Study or a full building Cost Segregation Study.

Tangible Asset Regulations Conundrum

The unintended consequences of the Tangible Property Regulations are that the IRS has taken Tax Professionals out of the equation of calculating the value of retired assets from previous remodels and renovations where there is limited data.

It’s not that the Tax Professional couldn’t do it on smaller items.  But what about large renovations that removed walls, electrical systems, plumbing.  Do you have defensible method of calculation?  Guessing doesn't qualify as a method.  Why not bring in the experts that have the tools, technologies, and experience to get it done faster and cheaper for your client.  CSSI typically doubles the results for a client over non-experienced Tax Professionals that are taking educated guesses at valuations.

Small and large firms are partnering with CSSI to provide the knowledge, expertise, technology, and engineering processes to perform reliable and affordable Asset Valuation Studies on client’s renovation projects and Cost Segregation Studies on their buildings.

CSSI’s Asset Valuation Process includes:

• Interview of the Client to define the scope of the project
• Provide a preliminary Estimate of Savings and Project Cost
• Engagement of CSSI to perform the study through a site survey, examination of plans, pictures, and interviews of owners
• Produce an IRS compliant report with all information that a CPA or Tax Professional needs to file.
• Assist the Tax Professional with the 3115
• Handle the 3115 from start to finish if  necessary
• Provide personnel and resources to defend report results that may be challenged in the future.

Just call us and we can take it from here…start to finish if necessary.

CSSI has a solution for the Conundrum.

Did you ever think the regulations would get so complicated that you would need a team of forensic tax engineers to scrub a depreciation schedule of all the retired building assets? Neither did we. We didn't make the rules, but we welcome the opportunity to become a valued and trusting partner to help you and your clients take advantage of the opportunity to turn those past mounds of debris into piles of cash.


Call your local CSSI rep to discuss how we can be your back office engineering-study team. 

Conundrum Solved.

What Is Cost Segregation?

Cost segregation is the IRS approved method of re-classifying components and improvements of your commercial building from real property to personal property. This process allows the assets to be depreciated on a 5, 7, or 15-year schedule instead of the traditional 27.5 or 39-year depreciation schedule of real property. Thus your current taxable income will be greatly reduced and your cash flow will increase.

Request your complimentary CSSI Property Analysis

When Should A Study Be Done?

It is best to have a study completed for the year the building or improvements are placed in service. 

However, IRS Revenue Procedures allow taxpayers to "catch up" on the depreciation that was not claimed from the first day the property was placed in service without amending prior years' tax returns. Furthermore, the IRS recently allowed for the "catch up" period all in the first year rather than over four years, when the Revenue Procedure 99-49 was first introduced. 

A cost segregation study can be performed on any property constructed, acquired or remodeled since Jan. 1, 1986.

Check Out More Frequently Asked Questions

3 Simple Steps To Reduce Taxes & Increase Cash Flow

Step 1: Analyze
Request your complimentary CSSI Property Analysis.

Step: 2: Review
Based on CSSI's Property Analysis, CSSI will consult with you and your advisors regarding your effective tax savings.

Step 3: Complete
Your CSSI Study is performed and completed within 4-6 weeks.