Sect. 263(a) and the New 2012 Repair Regulations

Outline

1. Proposed and temporary regulations issued December 2011 (TD 9564, REG-168745-03)
   1. Clarify and expand current standards under sections 263(a) and 162(a)
   2. Provide rules for applying these standards
   3. Guidance on accounting for, and dispositions of, property subject to Sect. 168
   4. Incorporate many existing standards under Sect. 263(a)
   5. Address handling of:
      1. Materials and supplies
      2. Repairs
      3. Rentals and leased property
      4. Amounts paid to acquire or produce tangible property
      5. Amounts to improve property
      6. Accounting and disposition rules for MACRS property
   6. Changes from 2008 proposal include:
      1. Revised rules for determining if amount paid is for improving a building
      2. Revised rules for determining if amount is paid for replacing a major component or substantial structural part
      3. Expanded definition of materials and supplies
      4. Alternative optional method of accounting for temporary spare parts
      5. Election to treat certain materials and supplies under de minimis rule
   7. Effective date tax years starting on or after Jan. 1, 2012
2. Critical compliance challenges and tax planning structures related to the new repair regulations

Benefits

The panel will analyze what has and has not changed from the 2008 proposed regulations when it comes to treatment of:

• Repairs, materials and supplies.
• Expenditures to acquire or produce, or to repair or otherwise improve, tangible property.
• Accounting and disposition rules for MACRS property.

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.