In an IRS supplementation to the tangible property regulations taxpayers (except excluded retailers) with audited financial statements can change their accounting method to treat 25% of qualified remodel-refresh costs as capital expenditures and 75% of such costs as currently deductible repair and maintenance expenses.
Excluded retailers include:
- Automotive Dealers
- Gas Stations
- Manufactured Home Dealers and
- Non-Store Retailers
As year-end planning begins to get underway, this supplementation exacerbates the need to analyze the probable tax savings of obtaining an audited financial statement and analyzing the costs of current and future remodel projects to potentially unlock these tax savings under this provision.
If you require a consultation regarding your new or past projects and/or need for an applicable financial statement please contact Blake Boshnack, CPA and Andrew Rotter, CPA at Citrin Cooperman.