The decisions about whether to expense or capitalize a repair, renovation or upgrade to your property has become more complicated, due to new IRS “temporary” regulations.
The recently issued regulations help define the determination on whether or not a repair, renovation, or upgrade may be expensed or if it must be capitalized and depreciated over a period of years. Having to capitalize repair costs could significantly impact your tax liabilities. In addition, these new regulations are especially important because of the reduced amount that can be immediately expensed through IRC 179 or bonus depreciation.
Although the regulations are characterized as “proposed” and “temporary,” the fact is they are now in effect, and you will need to know how they will affect you before filing your next tax return.
Let us help you understand these complex new regulations.