The temporary regulations may no longer be used for tax years beginning after December 31, 2013. However, they may still be used for tax years beginning before January 1, 2014 and after December 31, 2011. Unlike the final regulations, the temporary regulations' de minimis safe harbor provision contains an aggregate ceiling. Thus, where the option to apply the temporary regulations and the final regulations are available, consideration should be given to the limitations and benefits of each.
Other applicable rules could complicate the issue and minimize the benefits available.
For specific instructions:
* Internal Revenue Bulletin 2013-43 (T.D. 9636) at http://www.irs.gov/irb/2013-43_IRB/ar05.html contains final regulations that provide guidance on the application of IRC §§ 162(a) and 263(a) to amounts paid to acquire, produce or improve tangible property (i.e., final capitalization regulations);
* Treas. Reg. § 1.162-3 provides for the treatment of materials and supplies;
* Treas. Reg. § 1.162-4 provides for the treatment of repairs and maintenance;
* Treas. Reg. § 1.263(a)-1) provides for the treatment of capital expenditures;
* Treas. Reg. § 1.263(a)-2 provides for the treatment of amounts paid for the acquisition or production of tangible property; and
* Treas. Reg. § 1.263(a)-3 provides for the treatment of amounts paid for the improvement of tangible property.
If you have any questions, please do not hesitate to call (269) 343-8180.