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Federal Depreciation Handbook Updates

Valued Federal Depreciation Handbook customer,

This website will be periodically updated as warranted by important tax developments occurring subsequent to the publication of the Federal Depreciation Handbook. Please check back for updates.

Update April 2018 #2: The Federal Depreciation Calculator on Checkpoint has been updated for the relevant provisions of the Tax Cuts and Jobs Act (TCJA) and the Bipartisan Budget Act of 2018.

Update April 2018 #1: Bipartisan Budget Act of 2018 (Public Law 115-123)
The Bipartisan Budget Act of 2018, the primary purpose of which was related to spending and the budget of the United States government, also included several tax provisions. Of these, the Act’s one-year extension of a number of individual and business tax provisions that expired at the end of 2016 (Act Secs. 40001–40416) impacts content in the 2018 Federal Depreciation Handbook.

Click here for a table summarizing the Budget Act “extender” provisions that impact content in the 2018 Federal Depreciation Handbook.

Update January 2018: Tax Cuts and Jobs Act (Public Law 115-97)
On December 22, 2017, after the 2018 Federal Depreciation Handbook was published, the Tax Cuts and Jobs Act (TCJA) was enacted. Hailed as the largest major tax reform in over three decades, the TCJA contains a host of tax provisions that impact individuals and businesses.

With a few exceptions, the provisions of the TCJA first affect 2018 tax returns. However, a significant provision that impacts 2017 tax returns and content in the 2018 Federal Depreciation Handbook—immediate expensing of qualifying business assets (perhaps better known as 100% bonus depreciation)—is effective for property acquired and placed in service after September 27, 2017.

Click here for a table summarizing TCJA provisions that impact content in the 2018 Federal Depreciation Handbook. The table summarizes provisions first effective after 2017, as well as the 100% bonus depreciation provision effective starting in 2017.

Update February 2017: The Federal Depreciation Calculator on Checkpoint has been updated for content in the 2017 Federal Depreciation Handbook.

Update February 2016: The Federal Depreciation Calculator on Checkpoint has been updated for the relevant provisions of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act).

Update January 2016: Consolidated Appropriations Act, 2016 (Public Law 114-113): In December of 2015, after the 2016 Federal Depreciation Handbook was published, Congress passed, and the President signed into law, the Consolidated Appropriations Act, 2016 (CAA), which includes many tax provisions in its Division Q—Protecting Americans from Tax Hikes Act of 2015 (PATH Act) and several more in its Division P—Tax-Related Provisions.

In general, the CAA extended many expired individual and business tax deductions, tax credits, and other tax-saving provisions—some permanently, some through 2019, and some through 2016. The CAA also added or changed several non-extender tax provisions.

Click here for tables summarizing CAA provisions that impact content in the 2016 Federal Depreciation Handbook, which are organized as follows:

  • CAA Division Q (PATH Act) Tax Provisions
    • Expired Provisions Extended Permanently
    • Expired Provisions Extended Through 2019
    • Expired Provisions Extended Through 2016
  • CAA Division P Tax Provisions Added or Changed

Update December 2015: Capitalization vs. Expensing — IRS Guidance

  • De Minimis Safe Harbor for Deducting Repair Expenses Increased to $2,500. Under the tangible property regulations (TPRs), taxpayers must generally capitalize amounts paid to acquire or produce a unit of property. However, taxpayers can make a safe-harbor election to currently expense a de minimis amount of such expenditures. The de minimis amount for a taxpayer without an Applicable Financial Statement (AFS) (such as an audited financial statement or one required to be filed with the SEC) is $500 [Reg. §1.263(a)-1(f)(1)(ii)(D)]. This amount, which applies to many small businesses, has been criticized as not large enough. In response to comments, the IRS has increased the de minimis safe-harbor amount for a taxpayer without an AFS to $2,500, effective for costs incurred in tax years beginning after 2015. However, the IRS will not challenge this issue in pre-2016 tax years if the other requirements of Reg. §1.263(a)-1(f)(1)(ii) are met. Click on the following links for the text of the IRS guidance in Notice 2015-82 and News Release IR-2015-133.
  • Retail and Restaurant Establishments Get Relief from the Tangible Property Regulations. An IRS revenue procedure provides a safe harbor accounting method that taxpayers in the retail and restaurant industries can use to determine whether costs paid to refresh or remodel a qualified building are deductible repair and maintenance expenses under Code Section 162(a), or if they must be capitalized under Code Section 263(a) or Code Section 263A. The safe harbor method minimizes the need to perform a detailed factual analysis to determine whether each remodel-refresh cost is for repairs and maintenance or for an improvement. Under the safe harbor, a qualified taxpayer deducts 75% of its qualified costs as repairs and maintenance and capitalizes the remaining 25% of its qualified costs. Click on the following link for the text of Rev. Proc. 2015-56, which is effective for tax years beginning after 2013.

Update March 2015: The Federal Depreciation Calculator on Checkpoint has been updated for the relevant provisions of the Tax Increase Prevention Act of 2014.

Update February 2015: In order to comply with the tangible property regulations and take advantage of many taxpayer-friendly provisions, businesses with tangible property, repairs and maintenance or materials and supplies may need to file Form 3115 to request an automatic accounting method change. Download a special report that provides detailed guidance, practical tips and sample language for preparing Form 3115 on behalf of business clients, as updated for Rev. Proc. 2015-20 issued by the IRS on February 13, 2015.

Update January 2015: In December of 2014, after the 2015 Federal Depreciation Handbook was published, Congress passed, and the President signed into law, the Tax Increase Prevention Act of 2014 (Public Law 113-295, 12/19/14). In general, the Act extended many expired individual and business tax deductions, tax credits, and other tax-saving provisions through the end of 2014. Download a table summarizing Act changes impacting content in the 2015 Federal Depreciation Handbook.

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