What Are the Next Steps for Taxpayers?

ACT NOW! The tangible property regulations are mandatory, not elective. The regulations were generally effective for tax years beginning on or after January 1, 2014. The regulations no longer allow taxpayers to look back into prior years and "catch-up" any missed opportunities. Thus, consideration must be given each tax year on whether or not any benefits exist and, if so, any benefits must be captured on current year returns.

The IRS had previously issued a “stand-down” for audits on repairs, maintenance, and related dispositions, but this grace period has ended. Again, taxpayers no longer have the option to defer compliance. Audits in this area will likely be an area of high activity. Starting in 2018 a particular area of interest for the IRS is on how the gain or loss is calculated on disposition of assets.

Carefully conducted cost segregation studies should also be considered and can be combined with the adoption of these IRS regulations to increase any positive impact, and to lessen any potential negative impact. AGH’s cost segregation team of engineers and tax professionals are available to assist you in this implementation.

The final regulations are complex and confusing, and each taxpayer’s facts and circumstances are different. AGH’s team of professionals is proficient at evaluating the final regulations and applying them to individual taxpayer’s situation to achieve significant increases in cash flow.