Final regulations - Text of "repair regulations" 

September 13:  The Treasury Department and IRS this morning released for publication in the Federal Register final regulations (T.D. 9636) that provide guidance on the application of sections 162(a) and 263(a) to amounts paid to acquire, produce, or improve tangible property—the final "repair regulation."

Read KPMG’s overview, initial analysis, and observations of the tangible property regulations: TaxNewsFlash-United States

Read text of the final regulations [PDF 578 KB]

According to the preamble, the final regulations:

  • Clarify and expand the standards in the current regulations under sections 162(a) and 263(a)
  • Replace and remove temporary regulations under sections 162(a) and 263(a) and withdraw proposed regulations that cross referenced the text of those temporary regulations
  • Include final regulations under section 167 regarding accounting for and retirement of depreciable property and final regulations under section 168 regarding accounting for property under the Modified Accelerated Cost Recovery System (MACRS) other than general asset accounts

The final regulations do not finalize or remove the 2011 temporary regulations under section 168 regarding general asset accounts and disposition of property subject to section 168. Instead, these are addressed in a separate notice of proposed rulemaking [PDF 309 KB].

The final repair regulations are effective on September 19, 2013 (the date when they will be published in the Federal Register).

The final regulations are 222 pages. Once they have had time to consider the implications of these final regulations, KPMG tax professionals will provide an analysis of the regulations in a future edition of TaxNewsFlash.

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