Over the last two years the Treasury Department and Congress have made significant changes to tax implications of fixed asset purchases and building improvements. First, the U.S. Treasury Department issued new regulations for when expenditures related to real and tangible personal property need to be capitalized (Tangible Property Regulations). Second, Congress and President Obama agreed on legislation which permanently affects the tax rules for expenses of fixed asset purchases (PATH Act).
These actions give taxpayers two things: (1) an opportunity to take advantage of new rules, and (2) a level of certainty regarding tax deductions that taxpayers have not had in many years. With this new information, taxpayers should reassess their potential plans for fixed asset purchases or building improvements. They should also reassess their potential return on investment for fixed asset purchases. Contact a Lurie tax advisor to understand how these new laws can affect your plans for fixed asset purchases.