Edward C. Lowe, MAFIS, CPA
Principal
The IRS has increased the de
minimis safe harbor from $500 to $2,500 for taxpayers that don’t maintain an
applicable financial statement. (IRS notice 2015-82)
The de minimis safe harbor
was intended as an administrative convenience to allow taxpayers to deduct
small dollar expenditures for the acquisition or production of new property or
for the improvement of existing property, which otherwise must be capitalized
under Code Section 263(a). The increase is effective for costs incurred
after 1-1-2016, however use of the new threshold won’t be challenged in tax
years prior to 2016.
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