Formal Amendments by the IRS

A temporary repair has been announced recently by the Internal Revenue Service regarding the Capitalization regulations.


In the recent announcement, the pubic was notified of a 2012-73 change where capitalization is involved. To allow adaption of the new implementation, the IRS decided to make amendments, hence given more time for the public to be ready of such change.

To be able to achieve this, the IRS has announced to delay the implementation of the regulation that it be effective January 1, 2014.

Although this is the case, accountants have not overlooked the benefits of early application of such regulation, which has also been announced to be open to tax payers starting 2012. Some accountants advise that the companies apply the new rules even though it will be required to be applied on Jan 1 2014 as tax payers who do apply it immediately will certainly benefit. In addition, applying the rules early will immediately mean that these deductions will also be reversed in 2014 according to Rev. Proc. 2011-14. The amount of savings may not be as huge as people would think but it is still beneficial.


Posted by Diane Araga, on January 18, 2013 at 9:00 AM