This column provides tax preparers an outline of questions to ask clients when evaluating roof repair costs.
Tax Planning; Tax Minimization
The IRS issued guidance on how taxpayers can take advantage of various provisions enacted by last year’s PATH Act.
Taxpayers should note the interplay between tax accounting methods and tax credit eligibility when choosing to adopt or change their method specific to software development activities.
The IRS finalized regulations that implement new SEC rules that change how gains and losses in money market funds are calculated.
The IRS determined that the costs of acquiring domain names are to be capitalized as intangible assets and amortized over a 15-year period.
Taxpayers have had significant questions regarding the safe harbor.
IRS Affirms Deductibility of Some—but Not All—Computer Software Development and Implementation Costs
Not all computer software development and implementation costs are deductible when paid or incurred and certain software-related costs must be capitalized and recovered through amortization for federal income tax purposes.
Taxpayers apparently have been under the impression that the tax treatment of computer software costs was changed.
The IRS is permitting some taxpayers to use a safe-harbor method of accounting for determining whether expenditures paid or incurred to remodel are deductible or must be capitalized.
A new safe harbor allows retail and restaurant taxpayers to deduct 75% of qualifying expenditures for remodeling qualified buildings and capitalize just 25%.
Determining whether an expense is deductible as related to the sale of inventory or capitalizable under Sec. 263A appears to be less favorable to taxpayers following two recent court decisions.
The IRS announced it will raise the deductible amount for purchases of tangible property by taxpayers without applicable financial statements to $2,500 per item.
The regulations were meant to address a perceived abuse of taxpayers claiming a foreign currency loss by partially legging out of an integrated transaction.
Practitioners must carefully consider several tests under Sec. 461 to determine the deductibility of accrued warranty expense for tax purposes.
The IRS announced that is raising the current de minimis limit for deducting expenses for purchases of items of tangible property from $500 to $2,500 for taxpayers without applicable financial statements.
The IRS announced a safe-harbor method that allows qualifying taxpayers to deduct 75% of these expenses.
Taxpayers using the accrual-basis method of accounting were given a safeharbor to treat economic performance as occurring on a ratable basis for certain service contracts.
There is an overlap between Sec. 179 expensing and the materials and supplies and de minimis safe-harbor rules in the repair regulations.
The AICPA raised concerns about the low amount of the de minimis safe harbor threshold in the tangible property regulations and about the retrospective application of the new rules.
The IRS's issuance of several items of administrative guidance over the past few years indicates its increasing focus on the timing of an accrual-basis taxpayer's deduction of cash bonuses paid to its employees.