We are writing to inform you of a recently enacted update to the tangible personal property regulations. As you are aware, these regulations went into effect for tax years beginning on or after January 1, 2014, and provided for a de minimis safe harbor election that permitted taxpayers to deduct certain amounts paid for tangible property that are expensed for financial accounting purposes. Taxpayers without an applicable financial statement could elect to deduct a maximum of $500 in tangible property additions.
The IRS recently issued Notice 2015-82, which raises the de minimis safe harbor election threshold for taxpayers without an applicable financial statement to $2,500. This increase is effective for tax years beginning on or after January 1, 2016. In order to take advantage of this increase, please be sure to update your accounting capitalization policy.
As always, if you have any questions please do not hesitate to contact us.