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IRS Issues FAQ on Tangible Property Regulations

June 20, 2018

The U.S. Internal Revenue Service (IRS) has released a list of frequently asked questions (FAQ) on the recognition of tangible property.

Sec. 162 of the U.S. Internal Revenue Code (IRC) allows businesses to deduct all ordinary and necessary expenses incurred in carrying on the trade or business. Sec. 263(a) of the IRC requires businesses to capitalize the costs of acquiring, producing and improving tangible property.

The final tangible property regulations (PDF) released in 2013 combine decades of case law and other authorities into a framework to help businesses determine whether certain costs are deductible or must be capitalized. The FAQ organizes important elements of the regulations into an easily navigable format.

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