Free Consultation

BTR's News to Use

De Minimis Safe Harbor

Posted by Michael Royer on Mar 17, 2016 1:52:00 PM

For 2014, the IRS issued a whole new set of regulations governing the tax treatment of tangible property (buildings, equipment, computers, etc.) placed in service by a business, rental property owner, or farm.  Among these regulations was a new “de minimis safe harbor” (DMSH) for small capital expenditures.  This safe harbor, if elected on a tax return, stated that the IRS would not challenge the immediate deduction of any capital expenditures of under $500 per unit, provided that the taxpayer had in place, as of January 1, 2014, accounting procedures for tangible property (generally called a “capitalization policy”) that specified a DMSH amount.  For most taxpayers, this policy did not have to be written.  In addition, the taxpayer’s accounting procedures could specify a higher safe harbor amount if that was more applicable to their business.  However, this higher amount could be challenged by the IRS under audit

Read More

Topics: Tax Laws, Audit, IRS, De Minimis Safe Harbor

Subscribe to Email Updates

Recent Posts