IRS Issues Tangible Assets Regulations

IRS Issues Tangible Assets Regulations

The Internal Revenue Service (IRS) issued on Dec. 23, 2011, the much-anticipated regulations that govern the capitalization of amounts paid to acquire, produce, or improve tangible property. The regulations were issued in temporary form and generally are effective for tax years beginning on or after Jan. 1, 2012. They update and expand the proposed regulations issued in March 2008. These regulations are separate and distinct from the uniform capitalization rules under Section 263A of the Internal Revenue Code, which are more closely associated with amounts capitalized to inventory.