Skip to main content

Exit WCAG Theme

Switch to Non-ADA Website

Accessibility Options

Select Text Sizes

Select Text Color

Website Accessibility Information Close Options
Close Menu
Legacy Protection Lawyers St. Petersburg Estate Planning, Probate & Trust Lawyer
  • SCHEDULE A CONSULTATION TODAY!

Taking advantage of tangible property safe harbors

If your business has made repairs to tangible property, such as buildings, machinery, equipment and vehicles, you may be eligible for a deduction on your 2014 income tax return. But you must make sure they were truly “repairs,” and not actually “improvements.”

Why? Costs incurred to improve tangible property must be depreciated over a period of years. But costs incurred on incidental repairs and maintenance can be expensed and immediately deducted. Distinguishing between repairs and improvements can be difficult, but a couple of IRS safe harbors can help:

Routine maintenance safe harbor. Recurring activities dedicated to keeping property in efficient operating condition can be expensed. These are activities that your business reasonably expects to perform more than once during the property’s “class life,” as defined by the IRS.

Small business safe harbor. For buildings that initially cost $1 million or less, qualified small businesses may elect to deduct the lesser of $10,000 or 2% of the unadjusted basis of the property for repairs, maintenance, improvements and similar activities each year. (A qualified small business is generally one with gross receipts of $10 million or less.)

Contact us to ensure that you’re taking all of the repair and maintenance deductions you’re entitled to.

Facebook Twitter LinkedIn

By submitting this form I acknowledge that form submissions via this website do not create an attorney-client relationship, and any information I send is not protected by attorney-client privilege.

Skip footer and go back to main navigation