Repairs & Maintenance StudyCredits & Accounting Methods: Tangible Property Regulations

Repair and Maintenance Services The final Tangible Property Regulations provide new definitions and guidance for determining when costs are to be capitalized as betterments to property, restorations of property, and adaptations of property. The Repair & Maintenance Study focuses on identifying expenditures that do not meet these definitions and can therefore be expensed in the current year.

There are two elements to a Repair & Maintenance Study:

` A thorough analysis of a business’ deductions for repairs and maintenance costs for items that perhaps should be capitalized and depreciated; and more importantly

` A comprehensive review of the current year’s costs that have been capitalized which could be deducted as repairs or maintenance costs.

Our Repair & Maintenance Study focuses on the latter. Cherry Bekaert LLP can help your business comply with the new Tangible Property Regulations, while also helping to optimize your cash flow by maximizing deductions under these new rules.

Who Should Consider This Opportunity? ` Businesses who conservatively lean toward capitalizing expenses.

` Businesses that have repair and maintenance expenses in excess of $100K in a given year.

` Businesses that have replaced, improved, or refurbished major components of operating equipment during the current year.

` Businesses that have completed major renovations or repairs to real property during the year.

When Should You Consider This Opportunity?The regulations were adopted as of January 1, 2014. Determination of units of property should be made as soon as possible for proper application of these rules.

There is no better time than the present!

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Ronald G. Wainwright, Jr., CPA, MST Partner, National Leader Credits & Accounting Methods rwainwright@cbh.com 919.782.1040

Dawn Polin, CPA Senior Manager, Federal Credits & Accounting Methods dpolin@cbh.com 919.719.4223