The IRS has released preliminary information regarding further changes to the repair regulations

In IRS Notice 2012-73, issued Tuesday, the main issues within the guidance are as follows:

•  The final regulations related to repair vs. capitalization will be released in 2013 and will be effective on or after Jan. 1, 2014.

•    There will be changes to the temporary repair vs. capitalization regulations that were released on Dec. 23, 2011. The IRS has so far stated the following sections may be changed when they are finalized:

   o    Dispositions: Sections 1.168(i)-1T and 1.168(i)-8T;
   o    De Minimis Rule: Section 1.263(a)-2T(g);
   o    Safe Harbor for Routine Maintenance: Section 1.263(a)-3T(g).  
   o    There is further indication there could be relief for small businesses.

• The effective date of the temporary repair vs. capitalization regulations will change from Jan. 1, 2012 to Jan. 1, 2014.

• Taxpayers will have the option to apply the temporary or final regulations to tax years beginning on or after January 1, 2012 through the end of 2013.

For the full text of IRS Notice 2012-73, click here.

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