KBKG strives to be a thought leader in the areas we service and we’re proud so many CPAs rely upon the tools we’ve created. For those applying the new Tangible Property Repair Regulations, the first step in a proper Repair vs. Capitalization analysis is to identify and understand the Unit of Property (UOP). For real property, this involves understanding the differences between "building systems", their "major components", and "incidental" building components.
The KBKG UOP & Major Component Chart for Buildings was created to help you identify building systems and typical "major components" in real estate assets. Replacing a major component is a capital expenditure, while replacing an incidental component is generally expensed. (KBKG Repairs vs. Capitalization Decision Tree - Page 2)
Below are supplemental aides related to the Tangible Property Repair Regulations.
For additional tools, please visit KBKG.com/resources.
Repair vs. Capitalization Decision Tree
Summary of how to determine whether an expenditure to tangible property is a repair expense or should be capitalized. » KBKG Repair vs. Capitalization Decision Tree
Repair vs. Capitalization Accounting Method Changes and Election
Chart showing each new Accounting Method Change made available by the Repair Regulations.
This is a great checklist to determine what action must be taken for each client.
» Repair vs. Capitalization Accounting Method Changes and Election Chart