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IRS increases tangible property expensing limit to $2,500 for certain taxpayers

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Tangible property expensing limitThe IRS has increased the de minimis safe harbor limit for expensing tangible property that is expensed for book purposes from $500 to $2,500 for taxpayers without an applicable financial statement (AFS). The limit for taxpayers with an AFS remains at $5,000.  

Notice 2015-82, issued on Nov. 24, increases the de minimis safe harbor limit provided in Treas. Reg. Sec. 1.263(a)-1(f)(1)(ii)(D) and is effective for costs incurred during taxable years beginning on or after Jan. 1, 2016. However, for taxable years beginning before Jan. 1, 2016, the notice states the IRS will not bring up in examination the issue of whether taxpayers without an AFS may use the new threshold amount, provided they meet all other requirements.

For more information, see our Tax Flash.

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