The IRS has issued new guidance and regulations that will complicate your tax returns this year and will alter your decisions on how you operate your real estate investment properties.
Our good friends and CPA’s at Timpe CPA’s have alerted us to this major shift as it relates to expensing vs. capitalizing various purchases for your investment property and rental property.
Here’s the full PDF explanation in detail: 3115_info
For some of us, it will simplify our accounting and tax preparation…for others, not so much.
Regardless, if you are a savvy investor, you’ll get with your helpful tax professional quickly to plan for 2014 tax returns and, more importantly, help plan your purchases and repairs in 2015.
To reach the folks at Timpe CPA, here’s their website: http://timpecpa.com/
Hot off the IRS website update:
Media Relations Office Washington, D.C. Media Contact: 202.317.4000
www.irs.gov/newsroom Public Contact: 800.829.1040
IRS Makes it Easier for Small Businesses to Apply Repair Regulations to 2014 and Future Years
IR-2015-29, Feb. 13, 2015
WASHINGTON —The Internal Revenue Service today made it easier for small business owners to comply with the final tangible property regulations.
Requested by many small businesses and tax professionals, the simplified procedure is available beginning with the 2014 return taxpayers are filling out this tax season. The new procedure allows small businesses to change a method of accounting under the final tangible property regulations on a prospective basis for the first taxable year beginning on or after Jan. 1, 2014.
Also, the IRS is waiving the requirement to complete and file a Form 3115 for small business taxpayers that choose to use this simplified procedure for 2014.
“We are pleased to be able to offer this relief to small business owners and their tax preparers in time for them to take advantage of it on their 2014 return,” said IRS Commissioner John Koskinen. “We carefully reviewed the comments we received and especially appreciate the valuable feedback provided by the professional tax community on this issue.”
The new simplified procedure is generally available to small businesses, including sole proprietors, with assets totaling less than $10 million or average annual gross receipts totaling $10 million or less. Details are in Revenue Procedure 2015-20, posted today on IRS.gov.
The revenue procedure also requests comment on whether the $500 safe-harbor threshold should be raised for businesses that choose to deduct, rather than capitalize, certain capital expenses.
Dan Baldini is the Founder of Polaris Real Estate & Polaris Property Management, LLC and is also an Adjunct Professor in the College of Business Finance Department at Butler University in Indianapolis where he teaches Real Estate Investing.
Dan focuses his practice on the residential real estate markets including Indianapolis, Carmel, Zionsville, Fishers and other surrounding areas. Dan continually seeks out new resources for Team training and education in order to keep all the Team members skills on the leading edge of real estate best practices. He is an active real estate investor himself, owning and managing a portfolio of investment properties in the Indianapolis markets.
A resident of the Northside area since 1979, Dan has extensive intimate knowledge and experience of the market forces that dominate the Zionsville, Carmel, Fishers, and Indianapolis real estate markets. He has been active in real estate since 1996 with a specific focus on North side properties. Dan is an active networker in his local communities as well as with top agents nationwide.