The recently-issued tangible personal property regulations spend a couple of hundred pages attempting to make clear what expenditures with respect to tangible property can be deducted and which must be capitalized. As the tax community looks forward to a lot of extra work to cope with this "clarification," there is one election that may reduce the administrative burden very considerably. The election, a so-called "de minimis" election for certain property acquisitions, generally allows the taxpayer to treat the acquisitions the same for tax and book purposes.
As detailed by TaxGroup Partners, the election can be made after the end of the year, but in a fairly spectacular trap for the unwary, it is permitted only if the taxpayer has established certain policies before the beginning of the year. That means a lot of taxpayers must take action before 31 December 2013. If you are one of them (or know one of them), the time to start thinking about the election is now.
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