Tax Accounting Corner

Unless they have been under a rock, most tax executives and their advisors have heard that the Treasury Department released the final version of the Tangible Property Regulations (the "Regulations"). As a partner that focuses on accounting methods, including the capitalization and cost recovery of tangible property, the author has had the "opportunity" to spend a significant amount of time discussing the Regulations with clients. One of the most talked about areas for him has been the de minimis safe harbor, which essentially allows eligible taxpayers to follow their book treatment and deduct amounts paid to acquire or produce amounts deemed to be de minimis under the financial/book accounting rules. Of interest to taxpayers that are passthrough entities, is that the de minimis safe harbor requires an applicable financial statement and a written book policy. However, some passthrough entities do not have an applicable financial statement or written book policy.