Content area
Full Text
New IRS regulations regarding repairs and maintenance of tangible property will affect most businesses. But cashing in big time by saving tax dollars will be commercial real estate firms and others that own a lot of property.
The byzantine new regulations, documented over more than 250 pages, went into effect Jan. 1, and affect all businesses writing off costs to repair, maintain, improve or replace property. There are several important takeaways, which will invariably lead to discussions with accountants, the preparation of additional documents, possible changes in quarterly estimated tax payments and the filing of a new form come tax time.
One major change is that separate systems within a building, such as the HVAC, plumbing and electrical systems and the escalators and elevators, are now considered distinct units of property and will be treated as separate assets for accounting purposes.
To determine the appropriate building systems and components, many companies will need to commission a "cost segregation study" by an accounting firm or a boutique firm...