The IRS has released new answers to Frequently Answered Questions (FAQs) on the final tangible property regulations, including information on simplified procedures for small business taxpayers. The FAQs provides guidance on the de minimis safe harbor election, which allows many businesses to do away with capitalizing and depreciating (or claiming a Section 179 expense) for many lower-cost assets, such as furniture, equipment, and computers.
They also clarify that the de minimis safe harbor election is not a change in accounting methods and does not require the filing of Form 3115 (Application for Change in Method of Accounting). Nor does a taxpayer need to file a Form 3115 to stop using the de minimis safe harbor for a subsequent tax year. Additionally, the FAQs explain the rules for the treatment of materials and supplies costs.
Click here to view the tangible property final regulations FAQs on the IRS website.
