Nonprofit Blog

Deductibility of a repair expenditure is based on a taxpayers facts and circumstances.  Below is a series of questions to ask to finally arrive at the answer of deductibility. The following questions can help in making the determination. However, the following questions are not all inclusive and an answer to one question may lead to another question to ensure clarification and understanding of the facts and circumstances.

There are numerous tax compliance and financial accounting implications related to the Tangible Property “Repair” Regulations (“Regulations”). The implementation of these Regulations will likely require multiple, annual tax elections and tax accounting method changes. These Regulations affect capitalizations procedures and policies related to acquisition, production, and improvement of tangible property and will affect the determination of current taxable income, deferred income taxes, and liabilities for uncertain tax benefits (“FIN 48”). This ASC 740 Q&A addresses the main tax compliance and reporting requirements for businesses and the United Stated Generally Acceptable Accounting Principles (“GAAP”) implications (i.e., financial reporting aspects).