Final regulations amend the uniform capitalization rules

By Alistair M. Nevius, J.D.

Editor: Sally P. Schreiber, J.D.

On Nov. 19, the IRS issued final regulations (T.D. 9843) that amend the uniform capitalization (UNICAP) rules under Sec. 263A. The IRS also updated the procedures by which taxpayers can get automatic consent to change their methods of accounting to reflect the new regulations (Rev. Proc. 2018-56).The IRS says the rules issued in T.D. 9843 are intended to reduce various "compliance costs, burden, and administrative complexity" under Sec. 263A. The regulations provide rules for the treatment of negative adjustments related to certain costs required to be capitalized to property produced or acquired for resale. They also provide a new simplified method of accounting — called the modified simplified production method — for determining the additional Sec. 263A costs that must be capitalized to ending inventory or other property on hand at the end of the year. For details about these regulations, see "Negative Additional Sec. 263A Costs," in the Tax Clinic.

Newsletter Articles

TECHNOLOGY

2018 tax software survey

Among CPA tax preparers, tax return preparation software generates often extensive and ardent discussion. To get through the rigors of tax season, they depend on their tax preparation software. Here’s how they rate the leading professional products.

DEDUCTIONS

Qualified business income deduction regs. and other guidance issued

The package includes final regulations, guidance on how to calculate W-2 wages, a safe-harbor rule for rental real estate businesses, and new proposed rules on the treatment of previously suspended losses.