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TPR TOOLS AND TEMPLATES© - TABLE OF CONTENTS

Copyright Boyer & Ritter and Eric P. Wallace CPA, January 2015TPR (Tangible Property Regulations) Tools and Templates

Section Listing: Number Description

0 TPR Tools & Templates – Table of Contents1 Getting Started2 Source Documents3 TPR Method Change Charts and Reg. Examples4 Research5 Firm Tools & Communications6 Flowcharts & Explanations7 Method Changes & Forms 31158 Instructional Webcasts & PowerPoint Presentations9 Accounting Policies, Checklists, and Related Communications

10 Work Programs 11 Miscellaneous

A. Firm LogisticsB. 481(a) Adjustments

12 Elections 13 TPR Communications by Eric Wallace 14 Completed 3115 Examples 15 Addresses and Processing of 3115s

Index Number

Name of the Document

Description Status

Section 0. TPR Tools & Templates – Table of Contents

0.1. Introductory Comments – TPR Tools & Templates

Narrative on the TPR issues that CPA firms and taxpayers face. A good overall sum-mary of their importance and need to act.

5/19/2014

0.2. TPR Tools & Templates – Ta-ble Of Contents

This document shows the latest updates to the ShareFile for the TPR Toolkit. The items highlighted in Yellow show what was changed in this latest update.

1/27/2015

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Section 1. Getting Started1.a. Summary of the

Final Tangible Property Regu-lations

A 15 page document that summarizes the final Tangible Property Regulations in a fair amount of detail

10/16/2014

1.b.2. TPR Outline on what to con-sider for tax year 2014 – Fi-nal Regulations

Details the complete issues, actions, processes that a CPA firm needs to address related to the Final & Proposed TPR (Word, 7 pages)

10/16/2014

1.c.2 CPA Firm TPR Action Items Outline –Final Regulations

There are many action items that CPA firms can take advantage that will put them ahead of the coming crunch – That all TPR changes under the Final Regulations must be per-formed by tax year 2014

10/16/2014

1.e. Frequently Asked Ques-tions

A series of Frequently Asked Questions and Responses that have been submitted by users of these TPR Tools & Templates

10/16/2014

1.f. Frequently Asked Ques-tions – Novem-ber of 2014 to January 23, 2015

The most recent questions and answers during this time period are provided. Over 20 pages of new Q and As

1/23/2015

Section 2. Source Documents2.a. Table of Con-

tents - Treasury or IRS TPR Source Docu-ment Listing w Final & Pro-posed Regula-tion Items

Pdf, one page. Listing of Treasury or IRS Source Documents related to the TPRs with indication of the Toolkit number that corre-sponds to the particular document.

2/28/2014

2.b.2. and 2.b.3.

Outline of Final and Proposed TPRs with Pre-amble Notes and Examples

Outlines of Final and Proposed TPR Regula-tions with Preamble Notes and examples

10/05/13

2.c.1. Code Section Listing of IRC Sections Ad-dressed in the Repair Regula-

2 Page Word document Listing the IRS Code Sections Addressed in the “Repair” Regula-tions

8/27/13

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tions2.c.2. Through 2.c.XIV

2.d.1. (Rev. Proc. 2014-16)

2.e. (IRS Directives)

Source Docu-ments Copies and other supporting documents.[see table of con-tents for listing of items and index-ing]

These are the documents that support what a CPA firm will need to have in order to de-velop a full and proper tax practice related to the TPRs. These documents include the fol-lowing: IRS Form 3115 instructions updated March of 2012 (pdf); Temporary regs. In Pdf form (167 pages); Rev. Proc. 2011-14 updated through method #180 in Pdf form (210 pages); Rev. Proc. 87-56 (on depreciation class lives) in pdf (46 pages); Rev. Procs 2012-19 and -20 in Pdf form (53) pages,, and others

2/1/2014

2.g. Circular 230 Circular 230, June of 2014 update. This is the document that requires taxpayer’s to comply with the TPRs and any and all laws and regu-lations in the preparation of tax returns.

9/02/2014

2.h. Final MACRS Disposition Reg-ulations

This is the final MACRS disposition regula-tions, in Word, issued August 14, 2014, that address the final TPRs for 1.168(i)-1 (GAAs) and 1.168(i)-8 (MACRS dispositions and Par-tial Asset Dispositions (PADs)

8/14/2014

2.h.1. Rev. Proc. 2014-54, issued September 18, 2014.

This is the final MACRS disposition account-ing method procedures detail.

9/30/2014

2.h.2. Rev. Proc. 2014-54, issued September 18, 2014.

This is the final MACRS disposition account-ing method procedures detail where EPW has inserted his comments and explanations in highlighted areas within the Rev. Proc.. This is provided to assist one in understanding the rules.

9/30/2014

2.j.1. Rev. Proc. 2015-13, issued January 19, 2015

This RP replaces RP 2011-14 and RP 97-27 and covers both automatic and non-automatic method changes.

1/27/2015

2.j.1. Rev. Proc. 2015-14, issued January 19, 2015

The RP replaces the Appendix to RP 2011-14 and is a complete listing of all of the automatic methods issued by the IRS through the date of its issuance. In future years, when the IRS needs to update automatic numbers, it will just replace this RP and RP 2015-13 will remain the same.

1/27/2015

Section 3 TPR Method Change Charts and Reg. Examples

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3.a. Summary Table of Methods Change For The Final, Proposed, and Temporary TPRs

One Excel file that contains the following: (Tab one) TPR Method Changes Summary Ta-ble: includes listing of method numbers, de-scriptions of each method, applicable 2011-14 appendix section, required methods of recog-nizing/implementing the required changes (such as in a 481(a) adjustment, cut-off method, or modified cut-off method), listing of required matching additional concurrent auto-matic method(s)(if filed in the same tax year), whether statistical sampling is permitted, and whether matching 263A changes are required(Tab two) Reference Tool: Table of TPR reg-ulation sections matched to the automatic method change number, also by titles; also in-cludes listing of other subjects or other details in the Reg. Sections; also includes detailed de-scriptions of each section, and number of ex-amples of each section contained in the final, proposed, and temporary regulations

2/2/2014

3.b.1. TPR Temporary Regs. - Exam-ples, Compiled

Word Document of 43 pages. Copies of all of the temporary TPR examples broken out into 19 different example sets, in order of the regu-lation code sections.

8/27/13

3.b.2. TPR Final And Proposed Regs. – Examples Compiled

Word Document of 43 pages. Copies of all of the temporary TPR examples broken out into 24 different example sets, in order of the regu-lation code sections

10/5/13

3.c.1. Alternative of Book verses Tax – Capitaliza-tion to R & M Requirements or Choices

Excel file to show what is required to be matched for book and tax and what other choices are available for all of the TPR code sections.

2/2/2014

3.d.1. Visual Applica-tion of the Final and Proposed TPR Regs. Appli-cable Tax Years

This document shows in a visual form each regulation method, its applicable or available tax years, the eight different po-tential ways that the final methods are ap-plied or elected, and the final TPR method changes numbers that match the various methods.

9/25/2014

Section 4. Research4.a. Narrative and Re-

search Regarding How to Correct Depreciation Er-rors - Corrective Actions Available (i.e. ones requir-ing a 3115 and ones requiring

Pdf Document. The ways to correct depre-ciation errors, mistakes, omissions, etc. is quite complicated. This document explains what processes and forms have to be com-pleted in order to correct these errors or mistakes and supports those explanations with detailed research and supporting ma-terial. For example, most depreciation cor-rections can be done in the filing of a 3115 under automatic method #7. Other errors

8/27/13

Also Good For Final & Proposed

TPRs

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amended re-turns) – also see related Decision Flowchart

must be corrected with the filing of amended returns.

4.b. Research on the TPRs and Closed

Tax Years

It is important for a CPA to understand what issues have to be included in the 481(a) calculations relating to ‘closed tax years’. This document in Pdf form de-scribes and researches this issue fully en-abling CPA preparing the 3115s to be cer-tain about what issue from what tax issues should or should not be included in the 481(a), cut-off, or modified cut-off adjust-ments.

8/27/13

4.c. Cost Segregation Audit Technique Guide

10/31/13

4.d. 2013 Court Case on Depreciation – Impermissible to Permissible Method Change

CPAs need to be sure that when they pro-pose a change to a class life they have the appropriate amount of proof. This court case is a good example of this situation.

10/31/13

4.e. Research, Dis-cussion, and Conclusion of the Application of the DMSH to Items (M & S or UoP) that have a Useful Life of 12 Months or Less When Placed in Ser-vice

Many are confused on whether the dollar limitation of the DMSH also applies to items that have a useful life of 12 months or less. This five page document draws a conclusion on this issue and pro-vides all of the sections in the fi-nal TPR preamble and its regula-tions that support its conclusion.

1/04/2014

4.f. Court case sup-porting the 12 months or less issue above

Prudential Overall Supply v. Comm. USTC, T.C. Memo 2002-103, (April 23, 2002)

1/04/2014

Section 5. Firm Tools & Communi-cations

5.a.1. Depreciation File 2013 and Supporting Ta-bles

Excel file Template for use in performing the Asset File Data Analysis procedures outlined at 5.b.3. & 5.b.4., below.

10/19/2014

5.a.2. Calculation of Building or Building Com-

Excel file with examples of building dis-positions using the CPI rollback method. This Excel file also includes the CPI Table and the 39 and 27.5 year depreciation ta-

5/19/20148/18/2014

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ponents using the CPI Rollback Method as a reasonable method, consis-tently applied

bles and enables the user to easily and consistently compute the remaining depre-ciable basis that can be written off under method #177. [Note: this method can only be used through tax year 2013. For tax years after 2013, a TP must instead em-ploy the PPI rollback method. See 5.a.3. below.]

5.a.3. Calculation of Building or Building Com-ponents using the PPI Rollback Method as a reasonable method, consis-tently applied

Excel file with examples of building dis-positions using the PPI rollback method. This Excel file also includes the CPI Table and the 39 and 27.5 year depreciation ta-bles and enables the user to easily and consistently compute the remaining depre-ciable basis that can be written off under method #196 and/or #205. Note that a TP must use the PPI as the measurement for tax years 2014 and after and not the CPI. Additionally, a PPI rollback cannot be used where the TP has a betterment and/or an improvement as an asset that replaced the prior asset.

10/18/2014

5.b.1. TPR Tracking Spreadsheet

Excel file that enables a CPA to track the method filings for each of its clients, whether the filings were done under the Temporary or Final and Pro-posed Regulations, and what methods were filed for what tax years.

10/18/2014

5.b.2 BNA data ex-traction and Ex-cel Formatting

Word file outlining the step by step process to export fixed asset data out of the BNA Fixed Asset Program into an Excel file, and preliminary format-ting of that Excel file in preparation for data analysis.

11/6/13

5.b.3. ProSystems Data Extraction and Excel For-matting

Word file outlining the step by step process to export fixed asset data out of the ProSystems tax preparation Pro-gram into an Excel file, and prelimi-nary formatting of that Excel file in preparation for data analysis.

11/6/13

5.b.4. Tangible Prop-erty Regula-tions Assets Schedule Analy-sis Procedures

4 page Word document that outlines the various steps that CPA firms might want to implement as an internal TPR analysis process in order to identify as-sets that may need to be reviewed in light of the Final & Proposed Tangible Property Regulations.

10/19/14

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5.c.1.a.2. TPR Draft Ar-rangement Let-ter After Final TPRs

Seven pages in Word for modification as needed. This is a complete separate letter that focuses on a stand-alone TPR Study covering what is to be done by the CPA, what data is needed, etc.

10/19/14

5.c.1.b.2. Example Busi-ness Arrange-ment Letter Paragraphs Re-lated To Final & Proposed TPRs

These are the example engagement let-ter paragraphs that a firm can add to its typical engagement letters to address the Final & Proposed TPRs

10/19/14

5.c.1.c. Individual Ar-rangement Let-ter With TPR Changes

In Word for modification as needed. This is a separate arrangement letter that focuses on a TPR Study done as a part of the preparation of an individual income tax return covering what is to be done by the CPA, what data is needed, etc.

10/18/14

5.c.2.a. Section to add to the Individual Tax Organizer

Many firms typically send out individ-ual tax organizers to its 1040 clients. We have created a narrative and checklist that will assist your 1040 clients in producing the TPR data that will be needed in order to complete 3115s for their Schedule C, E or F Is-sues.

10/19/2014

5.c.3.b.2. Business Intro-duction to the Final & Pro-posed Tangible Property Regs

This example communication consists of a two page summary that covers the major issues contained in the Final & Proposed TPRs..

9/24/13

5.c.3.c. Final TPR ‘Must File’ Communi-cation to Busi-ness Clients

3 Page CPA firm letter/communication to clients informing them about the tax issues contained in the Final TPRs and directing them to contact their account administrator.

10/14/2014

5.c.4.b. Client Presenta-tion –Capitaliza-tion Of Tangible Assets – Final TPRs – Power-Point

70 plus page PowerPoint presentation structured for the CPA firm to be able to sit one on one with its larger clients and go over the major items of the TPRs. Intended for client meetings for you to explain the TPRs with the goal to get clients to buy in to the needed processes.

10/19/2014

5.c.9. Summary of the Final Repair TPRs, Capital-ization of Ex-

Word file containing a 15 page sum-mary of the Final TPRs Repairs, Capi-talization of Expenditures, and MACRS Property Dispositions.

10/16/2014

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penditures Re-lated To Tangi-ble Property, Fi-nal TPRs on MACRS Property Dispositions

5.d.1. Consequences of Not Filing the Required TPR 3115s by Tax Year 2014

Many have requested a complete sum-mary of the requirements of the TPRs to share with either clients or within the firm to firm members who may not believe that there are dire conse-quences in TPR non-compliance. This Word file details and supports those consequences.

10/15/2014

Section 6. Flowcharts & Explana-tions

Notes for the Fi-nal TPRs: if there are flow-charts that are different for the Temporary and Final, they will be so indicated below. Be care-ful not to use the Temporary flowcharts if you are em-ploying the final TPRs for a client or business.

The TPR consist of numerous complex de-cisions. We have developed flowcharts to assist the decision makers in understand-ing the TPR issues and to provide a visual tool for those issues. These are provided in both a narrative and available in a Visio (pdf) flowchart (if you want the actual Vi-sio file, please email us for that):There are many issues that enter into the decision of which tax year should a TP file the various TPR method changes. These flowcharts help the reader make those de-cisions and consider the various factors in-fluencing such.

6.a.1.

&

6.a.2.

Unit of Property Issues

The unit of property (UofP) is a very im-portant item to consider first in the capital-ization verses right off determination. The smaller the unit of property the more likely expenditures should be capitalized. This flowchart helps the reader in that process to make sure U of P is not deter-mined on a level that is smaller than nec-essary.

8/27/13

6.d.1.

&

6.d.2.

Material and Sup-plies, including De Minimis is-sues, Incidental and Non-inciden-tal M & S

This method is not a method that a TP would want to adopt any earlier than re-quired. That is currently the tax year 2014. This flowchart takes one through the con-siderations of that election.

8/27/13

6.f.1.

&

Reviewing Client’s Deprecia-tion Schedules

This flowchart describes the process and the items and issues that should be taken into consideration when reviewing the

8/27/13

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6.f.2.for Errors and/or Changes Needing Correction – Process and Methods to Cor-rect/Change

client’s depreciation schedule. There are four categories to look for and potentially three to four separate 3115 filings (or more) that can result from this effort. This flowchart helps the reader make those de-cisions and consider the various factors in-fluencing such.

6.g.1.

&

6.g.2.

General Asset Elections (GAA) – Why and When to do and Disposi-tions Related to

If a TP does not want to write prior build-ing dispositions, it will be required to elect a late GAA election for that particular building. Also see why a TP cannot elect a method #177 prior to a method #180 (late GAA election).

8/27/13

6.h.1., 6.h.2.&6.h.3.

In What Tax Years Should the Available TPR Method Changes be Filed or Con-sidered

This flowchart, narrative, and visual de-scription will assist CPAs in determining what tax years should be available for TPR method changes to be filed or consid-ered

11/11/13

6.i.1.

&

6.i.2.

Current or Prior Dispositions of Building or Structural Com-ponents, Includ-ing Issues Re-lated to the Supporting Facts

Narrative only: Once a building expendi-ture is determined that it has to be capital-ized, the TP must address whether such expenditure replaced a prior building as-set. Under the TPRs, such remaining unde-preciated basis must be written off, in full, in the year in which the applicable TPR method is adopted. This narrative outlines and takes the reader through the necessary steps.

8/27/13

6.l.1

&

6.l.2.

& 6.l.3.

Capitalization or Write off of Ex-penditures Un-der the Final TPRs

Pdf only (Visio file available on request). This is a five page flowchart. The first page is the overview. Second page is the flowchart for restoration issues, third page is adaption, fourth is betterment, and fifth page is for improvement considerations. The main page also flows to the flow-charts on SHST, RMSH, M & S, and DMSH as well. 6.l.3. is also provided: a Word document narrative on the flowchart issues of capi-talization verses write-off

12/04/2013

12/10/2013

6.m.1

&

6.m.2.

SHST (Small taxpayer safe harbor) Under the Final TPRs

Pdf only (Visio file available on request). This is a one page flowchart on the small taxpayer safe harbor (SHST) and its inter-action with DMSH (de minimis safe har-bor) and other TPR issues.

12/04/2013

Section 7. Method Changes & Forms 3115 (“F” in-dexes or references means for final revenue procedure changes)

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7F.a.1. Method Changes – Intro-duction & Orga-nization and Ta-ble of Contents

Table of contents and narra-tive outlining the structure and contents of Section 7.

1/26/2015

7F.a.2. IRS Releases the Final Ac-counting Method Change Procedures

Word document, 10 page narrative on the final method change procedures is-sued by the IRS in RP 2014-16 Janu-ary 24, 2014. This document explains the method changes to sections 1.162-4, 1.263(a)-1, -2, and -3. Note that the proposed method changes are not yet released.

1/26/2015

7F.a.1. Qualifying Tax-payer Explana-tion

RP 2014-16 and -17 introduced the definition of a “Qualifying” taxpayer. This Word document explains the items that a taxpayer who is a qualify-ing taxpayer should not complete on 3115.

1/26/2015

Contents and Explanations of what are in the TPR Tem-plates

These are completed 3115 common TPR method change packages (Group A) which include (one) its detailed explanations (in Pdf), (two) the required and supporting narratives for each method (in Word), and (three) fillable 3115s in pdf form. These are three separate documents, included for the price listed herein. Further descriptions of each of these items are:

Item one: the detailed explanation in-cludes (a) the description of the method change, (b) its applicability, (c) a copy of the law that supports the change, (d) an explanation of why a taxpayer would file this particular method change, (e) how the taxpayer is required to implement this change (i.e. 481(a) adjustment or other), (f) example showing how to calculate the method change, if a 481(a) change, (g) copies of examples of this method change from the TPRs, (h) listing of the Treasury contact(s) with name(s) and numbers, (i) a listing of the potential required matching method change(s) that must be filed in the same 3115 form (if the matching method change is filed in the same tax year, in-cluding their descriptions, method number, and applicability.

Item two: the required and supporting nar-rative for each method change includes words in “black” that should be included in each attachment, specific to the particu-lar method change, and words in “red” that

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should be deleted. The items in “red” in-clude explanations and example words that a taxpayer may need to rewrite or in-clude, as appropriate in order to adapt to its situation.

Item three: is the fillable pdf form, actual latest IRS 3115 form. In this fillable pdf, combined with its supporting narrative, we indicate which sections and questions should be answered by the taxpayer, and the recommended answers, depending on the taxpayer situation.

7.b.#184

R & M to Capi-talization

Note: While this form is presented in sepa-rate form, a taxpayer will typically file this method change as part of a combined 184, 186, and 192 filing

7F.b.1.Explanation (not a form)

7F.b.4. Explanation

Table of Con-tents of #184 in general

#184 combined with #22 or #23Explanation

Methods #184 (final) or #162 (temporary) for R & M to Capitalization Issues [Note that this final TPR revenue procedure method changes includes numerous regu-lation code sections and compiles many of the temporary method changes that previ-ously had separate method filings.The fol-lowing is the table of contents for the items in method #184 for 7F.b.:

1/26/2015

1/26/2015

7F.b.2.A. Attachment to 3115s - #184

This is the long form attachment to form 3115 for method #184. This form includes all of the typical methods under #184 such as R & M, RMSH, Unit of Property, and the RABI criteria.

1/26/2015

7F.b.2.B. Attachment to 3115s - #184

This is the short form attachment to form 3115 for method #184. This form includes all of the typical methods under #184 such as R & M, RMSH, Unit of Property, and the RABI criteria.

1/26/2015

7F.b.3.A. Fillable 3115 - #184 (long)

3115 fillable template for Long Form #184 method [this is for a taxpayer whose an-nual revenues are in excess of $10M, and who does have a prior years’ R & M item(s) that required capitalization (as Schedule E on page 8 is completed.)]

10/29/2015

7F.b.3.B. Fillable 3115 - #184 (long without capital-ization change)

Same without R & M capitalization 10/29/2015

7F.b.3.C. Fillable 3115 - #184 (short with capitaliza-tion change)

3115 fillable template for Short Form #184 method [for a taxpayer whose annual revenues are less than $10M, and who does have a prior years’ R & M item(s) that required capitalization (as Part II, Question 13 and Schedule E on page 8 is completed.)]

10/29/2015

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7F.b.3.D. Fillable 3115 - #184 (short without capital-ization change)

Same without R & M capitalization 10/29/2015

7F.b.5. Attachment to 3115 for 184, 186, 187, 192 and 23, long At-tachment and Schedule E

This form is the combined 184, 186, 187, and 192 WITH a 263A change of method #23 as well. This includes unit of property issues as well.

1/26/2015

7F.b.6. Form 3115 for 184, 186, 187, 192 and 23 with Sch E long form

This is the fillable Form 3115 for this combined method.

1/26/2015

7.c.#186 and/or #187

Material and Supplies

Note: While this form is presented in sepa-rate form, a taxpayer will typically file this method change as part of a combined 184, 186, and 192 filing

7F.c.1. Ex-planation (not a form)

Explanation of #186 and #187

Methods #186 and #187 (final) for non-in-cidental and incidental material and sup-plies (M & S) The following is the table of contents for the items in method #186 and #187 for 7F.c.:

1/26/2015

7F.c.A. Fillable 3115 - #186 and/or #187 (long without capital-ization change)

3115 fillable template for Long Form #186 and/or #187 method [for a taxpayer whose annual revenues are more than $10M.]

10/29/2014

7F.c.2. Attachment to 3115s - #186 and #187

This is the long form attachment to form 3115 for method #186 and/or #187. This form includes all of the typical methods under #184 such as R & M, RMSH, Unit of Property, and the RABI criteria.

1/26/2015

7.d. Removed De minimis under the Temporary

7.e. Removed RMSH under the Temporary

7.f.#177

Disposition of Assets

Note: These methods are only good through the proposed TPRs for tax year 2012 and 2013. For tax year 2014, see #196 and/or #205 and #206

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7.f.1., 7.f.2. & 7.f.3.7P.f.1. &7P.f.2.A. & B. &7P.f.3.A. & B. (A is the long and B is the short form ver-sions)

Method Change 177: Disposition of Building or Structural Com-ponent

[Updated for RP 2014-17 Changes] Title: Disposition of a building or structural component. This is for Rev. Proc. 2011-14, method change #177 including the following three sub-method changes: A: Appendix 6.29(2)(b): “reasonable allo-cation method”; B: Appendix 6.29(2)(c): “cost certain method”; or C: Appendix 6.29(2)(d): multiple asset ac-count, asset identification method change. These method changes include the three items as follows: (1) Explanation in Word, (2) ) Fillable 3115 in pdf, and (3) Support-ing 3115 Attachment Narrative in Word.

8/27/133/10/2014

7P.f.1. Ex-planation (not a form)

Method Change #177: Disposi-tion of Building or Structural Com-ponent

Proposed TPR Method #177 Title: Dispo-sition of a building or structural compo-nent. This is for Rev. Proc. 2011-14, method change #177. Proposed TPRs in-troduced the requirement for all taxpayers to file a method #196 in order to protect or permit the #177 481(a) adjustment. If the taxpayer previously filed a #177 under the Temporary TPRs, it must file a new #177 under the Proposed TPRs and a #196 in order to either protect the prior 481(a). If the taxpayer has not filed a #177 under the Temporary TPRs, it can file a #177 under the Proposed TPRs, but still must file a method #196.

3/10/2014

7P.f.2.A. Fillable 3115 - #177 (long)

Form 3115 for long form TP with Sched-ule E completed.

3/10/2014

7P.f.2.B. Fillable 3115 - #177 (short)

Form 3115 for short form TP with Sched-ule E completed.

3/10/2014

7P.f.3.A. Attachment to 3115s - #177

Long form attachment to 3115 (this is for a non qualifying TP).

3/10/2014

7P.f.3.B. Attachment to 3115s - #177

Short form attachment to 3115 (this is for a non qualifying TP).

3/10/2014

7.g. #178

Method Change 178: Disposition of Tangible De-preciable Assets (other than a Building or its Structural Com-ponents)

Title: Disposition of tangible depreciable assets (other than a building or its struc-tural components). This is for Rev. Proc. 2011-14, method change #178, Appendix 6.30(1)(a). This method changes include the three items as follows: (1) Explanation in Word, (2) Supporting Narrative in Word, and (3) Fillable 3115 in pdf.

8/27/13

7P.g.1. Ex-planation (not a form)

Method Change #178: Disposition of Tangible De-preciable Assets (other than a

Proposed TPR Method #178 for : Dispo-sition of tangible depreciable assets (other than a building or its structural compo-nents). This is for Rev. Proc. 2011-14, method change #178, Appendix 6.30(1)

3/10/2014

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Building or its Structural Com-ponents)

(a). Proposed TPRs introduced the require-ment for all taxpayers to file a method #196 in order to protect or permit the #178 481(a) adjustment. If the taxpayer previ-ously filed a #178 under the Temporary TPRs, it must file a new #178 under the Proposed TPRs and a #196 in order to ei-ther protect the prior 481(a). If the tax-payer has not filed a #178 under the Tem-porary TPRs, it can file a #178 under the Proposed TPRs, but still must file a method #196.

7P.g.2.A. Fillable 3115 - #178 (long)

Form 3115 for long form TP with Sched-ule E completed.

3/10/2014

7P.g.2.B. Fillable 3115 - #178 (short)

Form 3115 for short form TP with Sched-ule E completed.

3/10/2014

7P.g.3.A. Attachment to 3115s - #178

Long form attachment to 3115 (this is for a non qualifying TP).

3/10/2014

7P.g.3.B. Attachment to 3115s - #178

Short form attachment to 3115 (this is for a non qualifying TP).

3/10/2014

7.h. #179 Removed Disposition of GAA

7.i. #180 Removed GAA Election

7.j. #7 and #107

Depreciation Correction Method Filings

IRS Form 3115- Change in Accounting Method) Change in Depreciation Methods. (These 3115s are often needed to be filed in order to properly adopt the TPR. Tax-payers and their advisors should review the depreciation schedules and make the required corrections before the IRS denies the remaining depreciation under the 1.1013-3 rules (the “use it or lose it rules”). Any 3115s filed to correct depreci-ation may or may not need to be filed on the same 3115 form as any filings.

7.j.1., 7.j.2. & 7.j.3.

Method Change 7: Impermissible to permissible method of ac-counting for de-preciation or amortization (of MACRS property) (Comment: this is the automatic method that will be most typical in filing deprecia-tion corrections. An Example would be where an asset has been depreciated

Title: Impermissible to permissible method of accounting for depreciation or amortization (and one matched with 263A changes). This method change is for Rev. Proc. 2015-14, method change #7, Section 6.01(1)(a). This change applies to a tax-payer that wants to change from an imper-missible to a permissible method of ac-counting for depreciation or amortization (depreciation) for any item of depreciable or amortizable property: (i) for which the taxpayer used an impermissible method of accounting in at least two taxable years immediately preceding the year of change (ii) for which the taxpayer is making a change in method of accounting under § 1.446-1(e)(2)(ii)( d ); (iii) for which depre-ciation is determined under § 56(a)(1) , §

1/26/2015

B&R (1/27/2015)15

under an incor-rect life, e.g. 15 years instead of 5 years.)

56(g)(4)(A) , § 167 , §168 , §197 , §1400I , or §1400L(c) , under § 168 prior to its amendment in 1986 (former § 168 ), or under any additional first year deprecia-tion deduction provision of the Code (for example, § 168(k); and (iv) that is owned by the taxpayer at the beginning of the year of change. This method changes in-clude the three items as follows: (1) Ex-planation in Word, (2) Supporting Narra-tive in Word, and (3) Fillable 3115 in pdf. This is two method changes combined in one 3115, i.e. the 7 method combined with either 263A automatic method changes numbers 22 or 23. If the taxpayer is al-ready subject to 263A, then this method package is a must as the taxpayer must provide notice of any 263A costing method change(s).

7.j.4., 7.j.5. & 7.j.6.

Method Change 107: Impermis-sible to permissi-ble method of ac-counting for de-preciation or amortization for disposed depre-ciable or amortiz-able property. (This method change will apply if a taxpayer wants to take as a deduction de-preciation incor-rectly calculated (less than what was allowable) for disposed of property.

Title: Impermissible to permissible method of accounting for depreciation or amortization for disposed depreciable or amortizable property. This method change is for Rev. Proc. 2015-14, method change #107, Section 6.17(1)(a). This method change applies to a taxpayer that wants to take as a deduction depreciation incor-rectly calculated (less than what was al-lowable) for disposed of property. This method changes include the three items as follows: (1) Explanation in Word, (2) Sup-porting Narrative in Word, and (3) Fillable 3115 in pdf.

1/26/2015

7.k.#21

Removal Costs

7F.k.1. Ex-planation (not a form)

Method Change #21: Removal Costs

Final TPR Method #21 for Removal Costs Explanation. The Final TPRs introduced the opportunity for a TP to write off its re-moval costs when and only if it has a par-tial or prior asset disposition. This method is optional, meaning that a TP does not have to write off removal costs. If the TP does, however, it must file this new method #21 in order to have the right to write off its removal costs.

1/26/2015

7F.k.2.A. Attachment to 3115s - #21

Long form attachment to 3115 (this is for a non-qualifying TP)

1/26/2015

B&R (1/27/2015)16

7F.k.2.B. Attachment to 3115s - #21

Short form attachment to 3115 (this is for a qualifying TP)

1/26/2015

7F.k.3.A. Fillable 3115 - #184 (long)

Form 3115 for long form TP with Sched-ule E completed.

1/26/2015

7F.k.3.B. Fillable 3115 - #21 (long with-out capitaliza-tion change)

Form 3115 for long form TP with NO Schedule E completed.

1/26/2015

7F.k.3.C. Fillable 3115 - #21 (short with capitalization change)

Form 3115 for short form TP with Sched-ule E completed.

1/26/2015

7F.k.3.D. Fillable 3115 - #21 (short with-out capitaliza-tion change)

Form 3115 for short form TP with NO Schedule E completed.

1/26/2015

7.l.#184, 186,192

Combined

7F.l.1. Combined Method Changes 184, 186, and 192

When RP 2014-16 was released in January of 2014, it provided the requirement for a TP to include on one 3115 filing all meth-ods that apply to the same unit of property. That statement covers the automatic meth-ods covered by Section 10.11 to RP 2015-14 only (and not #7 on Impermissible de-preciation or #21 on Removal costs, or #196 or 205/206 on Prior Asset Disposi-tions). Therefore, a TP must file any and all of those automatic methods from Sec-tion 10.11 to RP 2015-14 in the same 3115 filing. In our review of those potential au-tomatic methods that must be filed on the same 3115, or could be filed on the same 3115, we have concluded that a TP should considering filing #184, #186, and #192 together. This section presents those com-bined filing alternatives.

1/27/2015

7F.l.2.A. Attachment to 3115s - #184,186,192

Long form attachment to 3115 (this is for a nonqualifying TP)

1/27/2015

7F.l.2.B. Attachment to 3115s - #184,186,192

Short form attachment to 3115 (this is for a qualifying TP)

1/27/2015

7F.l.2.C. Attachment to 3115s - #184,186,192

Long form attachment to 3115 w Sch E (this is for a qualifying TP)

1/27/2015

7F.l.2.D. Attachment to 3115s - #184,186,192

Short form attachment to 3115 w Sch E (this is for a qualifying TP)

1/27/2015

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7F.l.3.A. Fillable 3115 - #184, 186, 192 (long)

Form 3115 for long form TP with Sched-ule E completed.

1/27/2015

7F.l.3.B. Fillable 3115 - #184, 186, 192 (long without capitalization change)

Form 3115 for long form TP with NO Schedule E completed.

1/27/2015

7F.l.3.C. Fillable 3115 - #184, 186, 192 (short with capi-talization change)

Form 3115 for short form TP with NO Schedule E completed.

1/27/2015

7F.l.3.D. Fillable 3115 - #184, 186, 192 (short without capitalization change)

Form 3115 for short form TP with Sched-ule E completed.

1/27/2015

7.m. #196

Partial Asset Disposition(Voluntary) [see 7.p. also below and double check which method should apply]

Note: only available through tax year 2014

7F.m.1. Ex-planation (not a form)

Method Change #196: Late Partial Asset Disposition Election

Final TPR Method #196 for (voluntary) Late Partial Asset Dispositions. The Final MACRS disposition TPRs made available the opportunity for all taxpayers to file a method #196 in order to protect or permit the PAD 481(a) adjustment. If the tax-payer previously filed a #177 under the Temporary TPRs, it must file a #196 and/or a #205. If the taxpayer has not filed a #177 under the Temporary or Proposed TPRs, it can file a #196 and/or #205/206 under the Final TPRs depending on the sit-uation. See this explanation for the details of what to do for the particular client situa-tion.

11/2/2014

7F.m.2.A. Fillable 3115 - #196 (long)

Form 3115 for long form TP with Sched-ule E completed.

11/2/2014

7F.m.2.B. Fillable 3115 - #196 (short)

Form 3115 for short form TP with Sched-ule E completed.

11/2/2014

7F.m.3.A. Attachment to 3115s - #196

Long form attachment to 3115 (this is for a non-qualifying TP).

11/2/2014

7F.m.3.B. Attachment to 3115s - #196

Short form attachment to 3115 (this is for a non-qualifying TP).

11/2/2014

B&R (1/27/2015)18

7.n. #184, 186, 187, and #192

Combined [These were updated 1/27/2015 to add the RP 2015-13 changes.]

7F.n.1. Combined Method Changes 184, 186, 187, and 192

When RP 2014-16 was released in January of 2014, it provided the requirement for a TP to include on one 3115 filing all meth-ods that apply to the same unit of property. That statement covers the automatic meth-ods covered by the section 10.11 to RP 2015-14 only (and not #7 on Impermissi-ble depreciation, or #21 on Removal costs, or #196 or 205/206 on Prior Asset Dispo-sitions). Therefore, a TP must file any and all of those automatic methods from sec-tion 10.11 to RP 2015-14 in the same 3115 filing. In our review of those potential au-tomatic methods that must be filed on the same 3115, or could be filed on the same 3115, we have concluded that a TP should considering filing #184, #186, 187 (only if the taxpayer has not deducted incidental material and supplies when paid or incurred) and #192 to-gether. This section presents these com-bined filing alternatives.

1/27/2015

7F.n.2.A. Attachment to 3115s - #184,186,187,192

Long form attachment to 3115 (this is for a non-qualifying TP)

1/27/2015

7F.n.2.B. Attachment to 3115s - #184,186,187, 192

Short form attachment to 3115 (this is for a qualifying TP)

1/27/2015

7F.n.2.C. Attachment to 3115s - #184,186,187, 192

Long form attachment to 3115 w Sch E (this is for a qualifying TP)

1/27/2015

7F.n.2.D. Attachment to 3115s - #184,186,187, 192

Short form attachment to 3115 w Sch E (this is for a qualifying TP)

1/27/2015

7F.n.3.A. Fillable 3115 - #184, 186, 187, 192 (long)

Form 3115 for long form TP with Sched-ule E completed.

1/27/2015

7F.n.3.B. Fillable 3115 - #184,186, 187, 192 (long with-out capitaliza-tion change)

Form 3115 for long form TP with NO Schedule E completed.

1/27/2015

7F.n.3.C. Fillable 3115 - #184, 186, 187,

Form 3115 for short form TP with NO Schedule E completed.

1/27/2015

B&R (1/27/2015)19

192 (short with capitalization change)

7F.n.3.D. Fillable 3115 - #184, 186, 187, 192 (short with-out capitaliza-tion change)

Form 3115 for short form TP with Sched-ule E completed.

1/27/2015

7.p.#7 and #177

[Note: the Revenue Procedures state that if the taxpayer has a #7 (Impermissible to Permissible depreciation change) it should combine that with either #177, #178, #196, #205/206, depending on whether it has those applicable other methods to file. What the IRS does not tell us, however, if what method should the taxpayer match the change to if the taxpayer has several of those method filings. The following is an example of one of those combined filings.]

7P.o.1 Combined Method Changes 7 and 177

When RP 2014-17 was released in Febru-ary of 2014, it provided the requirement for a TP to include on one 3115 filing cer-tain concurrent methods. Therefore, if a TP has a method #7 change (impermissi-ble to permissible method changes) and a #177 (prior asset partial disposition) it must file these on the same 3115 filing. [Note that you can substitute a #178 with a #7, if you have a #178 instead of a #177. Also note that if you have a #7 and a #177 in addition to a #178 filing, they cannot be filed on the same 3115. Just note on the #178 that you have filed the concurrent #7 with the other method.]

3/17/2014

7P.o.2.A. Fillable 3115 Tem-plate – Combined #7 and #177

Form 3115 for long form TP with Sched-ule E completed.

3/17/2014

7P.o.2.B. Fillable 3115 Tem-plate – Combined #7 and #177

Form 3115 for short form TP with Sched-ule E completed.

3/17/2014

7P.o.3.A. Attachment to 3115s - Combined #7 and #177

Long form attachment to 3115 w Sch E (this is for a qualifying TP)

3/17/2014

7P.o.3.B. Attachment to 3115s - Combined #7 and #177

Short form attachment to 3115 w Sch E (this is for a qualifying TP)

3/17/2014

7P.o.4.A. Schedule for 481(a) to 3115s - Com-bined #7 and #177

Example 3115 481(a) schedule 3/17/2014

7.p.#205 and/

Disposition of Buildings

B&R (1/27/2015)20

or #206 and/or Assets other than Buildings

7F.p.1. Ex-planation (not a form)

Method Change #205 and/or #206: Dispo-sition of Buildings and/or Dispo-sition of As-sets other than Build-ings

Final TPR Method #205/206 for (manda-tory) Late Partial Asset Dispositions and/or for voluntary Prior Asset Dispositions (where the prior asset was separately stated on the taxpayer’s depreciation schedule). The Final MACRS disposition TPRs made available the opportunity for all taxpayers to file a method #196 and/or #205/206 in order to protect or permit the PAD 481(a) adjustment depending on the taxpayer facts. If the taxpayer previously filed a #177 under the Temporary TPRs, it must file a #196 and/or a #205. If the tax-payer has not filed a #177 under the Tem-porary or Proposed TPRs, it can file a #196 and/or #205/206 under the Final TPRs depending on the situation. See this explanation 7F.p.1.for the details of what to do for the particular client situation.

11/2/2014

7F.p.2.A. Fillable 3115 - #205/206 (long)

Form 3115 for long form TP with Sched-ule E completed.

11/2/2014

7F.p.2.B. Fillable 3115 - #205/206 (short)

Form 3115 for short form TP with Sched-ule E completed.

11/2/2014

7F.p.3.A. Attachment to 3115s - #205/206

Long form attachment to 3115 (this is for a non-qualifying TP).

11/2/2014

7F.p.3.B. Attachment to 3115s - #205/206

Short form attachment to 3115 (this is for a non-qualifying TP).

11/2/2014

Section 8 Instructional Webcasts & PowerPoint Presenta-tions

B&R (1/27/2015)21

8.a.1. How to navigate through the TPR Tools and Tem-plates©

Note that the download is large and will take time to download. Ad-ditionally, after the file is open, it may take a minute or two for the pre-sentation to start playing. There are no handouts – just sit back and watch as we go over the Tools and Tem-plates© in detail.

Using the Table of Contents as of 12/04/2013, and live screen shots of the Toolkit available in the Sharefile, Eric Wallace spends about an hour and a half going over what is in the TPR Tools and Templates© and how to use them in your practice. In this presentation, we describe how one can use the TPR Tools and Tem-plates© in order to understand the TPR is-sues, required understanding of the regula-tions, where to begin, how to prepare the applicable 3115s, and where all of these items are found in the TPR Tools and Templates©.

12/05/2013

8.c.1.

&

8.c.2.

Webcast – Tack-ling Three Top Fi-nal TPR Issues with handouts.

Webinar with accompanying handouts covering the new De Minimis rules, Build-ing Expense for Small Taxpayers, Partial Dispositions of Tangible property, and Ac-counting Method Changes related to these issues.

10/30/13

8.d.1. Foundation Princi-ple: How to account for the differences – the details of what is a 481(a) and the cut-off methods

When one adopts a new accounting method, the taxpayer is required to pick up the difference between the old and the new method by the IRS specified change method. The TPRs mostly require this dif-ference to be picked up in a 481(a) adjust-ment, but some are instead required to be reported under a cut-off method. In this presentation, we explain the details and rules of each.

10/1/13

8.e.1. Foundation Princi-ple: Unit of Prop-erty

Understanding the unit of property (UofP) principle is key to determining whether expenditure should be capitalized or not. Generally, the smaller the UofP, the more likely an expenditure should be capital-ized. In this presentation, we review the rules of what a UofP is, provide examples, and assist the reader/listener in mastering this concept.

10/1/13

8.f.1. Foundation Princi-ple: Why the TPRs were issued

The IRS and taxpayers have fought over the issues of capitalization or write off for decades. In an effort to reduce these dis-putes the IRS issued these TPRs and has moved its thoughts more towards what the courts have held on these issues. In this presentation, we review the where the IRS now stands on capitalization, materials and supplies, and repairs and maintenance and

10/1/13

B&R (1/27/2015)22

how we got to this point.

8.i.1.

&

8.i.2.

Webcast – TPR – Understanding Materials and Supplies Rules and Issues: along with handouts (2 hours)

Understand How to Treat Materi-als and Supplies under the New Final Tangible Property Regs With the recent release of the final tangi-ble property regulations ("repair regs") by the IRS, taxpayers and their advisors have struggled to understand the rules for hand-ing materials and supplies (M&S) ex-penses. The M&S rules interact with other parts of the regs, such as the De Minimis Safe Harbor (DMSH) rules and taxpayers and their advisors must sort out the impact of capitalization policies as well the use of applicable financial statements or the ab-sence of those statements.

12/04/2013

8.j.1.

&

8.j.2.

Webcast – TPR – Understanding the Safe Harbor for Small Tax-payers: along handouts (2 hours)

Understand How the Safe Harbor for Small Taxpayers Annual Elec-tion Works under the New 'Repair Regs'The Safe Harbor for Small Taxpayers (SHST) is an annual election that you must consider electing early for your clients for 2013. This election is not mandatory, but it can be elected as early as 2012 and certainly should be considered by all eligible taxpayers for 2013 and ev-ery year beyond. The SHST is part of the final tangible property regulations ("repair regs") released in September by the IRS. There are complexities to this portion of the regulations that present opportunities as well as pitfalls. For example, practition-ers must consider the interactions between the SHST and the De Minimis Safe Harbor (DMSH) and Routine Maintenance on Buildings (RMB).

12/10/2013

8.k.1.

&

8.k.2.

Webcast – TPR – Capitalization verses R & M: with handouts (2.5 hours)

Understand Distinctions between Capitalization and Repair and Maintenance ExpensesCapitalization versus Repair and Mainte-nance (R&M) is the issue that drove the development and release of the new Tan-gible Property Regulations (TPRs). This two-hour seminar provides a practical re-view of this central issue to the TPRs and the rules that need to be known and imple-mented. The final "repair regs" released in September require practitioners to take a close look at how expenses are being ac-counted for with their clients or firms in order to make sure that the tax accounting for common repair and maintenance projects is done properly. Wallace ad-dresses the issue of what is a betterment, improvement, restoration or adaptation as

12/16/2013

B&R (1/27/2015)23

well as other issues that your business or your clients need to get straight now that the new regs are finalized.

8.l.1.

&

8.l.2.

Webcast – TPR – Implementing the TPRs – Criti-cal Steps and Best Practices (2.5 hours) Jan-uary 15, 2013

Implementing the Tangible Prop-erty Repair Regulations: Critical Steps and Best Practices. a practical look at the best practices and implementa-tion steps that businesses and their advi-sors need to put to work right away under the "repair regs" for this filing season, as well as the strategic moves that will ensure a successful implementation for the 2014 tax season

1/15/2014

8.m.1.

&

8.m.2

Webcast – TPR – Understand Fi-nal and Pro-posed TPRs (8.0 hours)

Understand and Apply the Final and Proposed 'Repair Regs' to Ob-tain Tax Deductions for Your Busi-ness or Clients: This program will prepare you to discern (1) what decisions must be made right away to apply these regs to 2013 returns, (2) what schedules need to be prepared for Forms 3115, and (3) set up the necessary steps for the 2014 tax year.

1/22/2014

8.n.1.

&

8.n.2.

Webcast – TPR – Understand the Repair Regs Ac-counting Method Change Procedures (8.0 hours) [through RP 2014-16 only]

Understanding the Repair Regs Accounting Method Change Pro-cedures:This session is still valid, but only covers method changes through RP 2014-16. Re-call that RP 2014-16 is final but RP 2014-17 is not. See 8.o.1. for method changes through RP 2014-17.

2/26/2014

8.p.1. & 8.p.2.

Webcast – Depre-ciation and Bonus Depreci-ation (2.0 hours)

Depreciation and Bonus Deprecia-tion: This 2 hour session was taped April of 2014. This webinar explains how to do depreciation correctly. This is valuable material when scrubbing the depreciation schedules for method # 7 impermissible to permissible depreciation issues.

8/24//2014

8.q.1. & 8.q.2.

Webcast - Tangi-ble Property Regulations: Dealing with the Good, the Bad, and the Ugly of the ‘Re-pair Regs’ (Full-Day 8.0 Course)

Tangible Property Regulations: Dealing with the Good, the Bad, and the Ugly of the ‘Repair Regs’ (Full-Day Course). This 8 hour course covers the latest of the TPRs. While it does cover the final MACRS disposition TPRs it does not cover their method changes as those have not been released as of the date of this taping.

8/25/2014

8.r.1. & 8.r.2.

Webcast – Under-standing the Latest Repair Regs. Account-ing Method

On September 18, 2014, the IRS released final regulations (Rev. Proc. 2014-54) dealing with accounting method changes for MACRS property. This follows the re-lease on August 14, 2014 of final regula-

9/30/2014

B&R (1/27/2015)24

Change Proce-dures (Full-Day 8.0 Course)

tions under Section 168 regarding the dis-position of tangible depreciable property. Previously on February 28, the IRS re-leased the proposed MACRS disposition method changes (Rev. Proc. 2014-17) and, on January 24, the final accounting method change procedures (Rev. Proc. 2014-16) for the tangible property "repair" regulations (TPRs) covering the method filings for Sections 162 and 263(a). In this 8 hour program, you will learn the how, what, where, and when related to the filing of Forms 3115 and related Section 481(a) adjustments for the final TPRs. (Note that this can only now be viewed via a stream-ing download. Look at 8.r.1. for the in-structions for how to do the streaming download).

8.s.1. & 8.s.2.

Webcast – Tangi-ble Property Regulations – Understanding the DMSH, and handout

Understand How to Work with the De Minimis Safe Harbor Rules in the Final 'Repair Regs'With the release of the final tangible property regulations ("repair regs") by the IRS, taxpayers and their advisors continue to struggle to understand the de minimis safe harbor (DMSH) provi-sions of the new regulations. Sorting out the impact of capitalization poli-cies for taxpayers as well the use of applicable financial statements (AFS) or the absence of those statements can cause headaches for those looking to comply with these new regs.

10/6/2014

8.t.1. & 8.t.2.

Webcast - Tangi-ble Property Regs: Firm Lo-gistics for Deal-ing with the 'Repair Regs'" and handout

See 8.t.1. for instructions on how to stream this webinar. This webinar deals with the firm logistics that CPAs must ad-dress when preparing and considering TPR compliance issues for their clients. Also see outline added on firm logistics.

9/30/2014

8.u.1. &8.u.2.

Webcast - Tangi-ble Property Regs – Under-standing Capi-talization vs. Repair and Maintenance

[Note: this webcast is still good, but see later one in 8.y.1. below] See 8.u.1. for instructions on how to stream this webinar. Capitalization versus Repair and Maintenance (R&M) is the issue that drove the de-velopment and release of the new Tan-gible Property Regulations (TPRs). This two-hour seminar provides a practical review of this central issue to the TPRs and the rules that need to be known and implemented.

11/3/2014

B&R (1/27/2015)25

8.v.1. &8.v.2.

Webcast – Under-standing the Latest Repair Regulations

[Note: this webcast is still good, but see later one in 8.x.1. below] In this 8 hour webinar, I address many of the basic rules of the TPRs but I also provide the how, what, where, and when related to the filing of Forms 3115 and related Section 481(a) adjustments for the common method changes of the final TPRs.

11/20/2014

8.w.1. &8.w.2.

Webcast – TPRs Understanding the Unit of Property

The 'Unit of Property' Is the Key in Your Repairs versus Capitalization Decision un-der the New Final TPRs. With the recent release of the final TPRs by the IRS, tax-payers and their advisors have struggled to understand the rules for determining ex-actly what is a unit of property (UOP). The UOP rules interact with other parts of the regs, such as the capitalization criteria of the restoration, adaptation, betterment or improvement (RABI) rules that are crit-ical to deciding whether an expenditure should be capitalized or expensed. Making UOP determinations are often difficult, such as for complicated buildings like shopping malls, manufacturing plant pro-duction lines, when leased property is in-volved, and many other situations. Prop-erly stating to the IRS what is a UOP could allow for deduction of more expen-ditures than what would otherwise be pos-sible. UOP statements must be made to the IRS in a change of tax accounting method for the 2014 tax year.

11/26/2014

8.x.1. & 8.x.2.

Webcast -TPRs: From Concepts to Practical Ap-plications"

Practical Approach on How to Apply the Tangible Property ‘Repair’ Regs for Your Business or Clients. CPAs and businesses are beginning to understand the burden and work effort required in order to imple-ment the tangible property regulations (TPRs) – the "repair regs." While a burden and tremendous work effort is needed, the TPRs also provide current tax deductions thought not possible before their release. These new rules must be implemented no later than tax year 2014 and they require the filing of certain Forms 3115, at a mini-mum, in order to implement to new annual elections. There is also no way around the minimum efforts required – the filing of several "protective" method changes (IRS Form 3115 Change in Method of Account-ing), even for small businesses.

1/12/2015

8.y.1. & 8.y.2.

Webcast- Tangi-ble Property Regulations –

See 8.y.1. for instructions on how to stream this webinar. Capitalization versus Repair and Maintenance

1/21/2015

B&R (1/27/2015)26

Understanding Capitalization vs. Repair and Maintenance

(R&M) is the issue that drove the de-velopment and release of the new Tan-gible Property Regulations (TPRs). This three-hour seminar provides a practical review of this central issue to the TPRs and the rules that need to be known and implemented.

Section 9 Accounting Policies, Checklists, and Related Communications

9.a.1. Example of a Capital Budget Process

Word document to assist CPAs for clients that do not currently have a capital budget process. This is not required for tax pur-poses and is therefore provided to assist CPAs in management advisory services.

11/25/13

9.b.1. Short Form Ac-counting Policy and-or Commu-nication – Tax-payer with a

Non AFS DMSH

The purpose of this form is to: (a) Assist CPAs in communicating the need to its clients to put an accounting policy in place before January 1, 2014 (or its fiscal tax year beginning afterwards), and (b) enable the client to document such policy. Note: this communication and response is re-quired for all separate trades or businesses and any separate legal entities, such as sin-gle member LLC before 1/1/14 (Word document, 2 pages)

11/25/13

9.b.2. Short Form Ac-counting Policy and-or Commu-nication – Tax-payer with an AFS DMSH

Same as above but applicable to taxpayers with AFS (Word document, 3 pages)

11/25/13

9.c.1. Accounting Pol-icy Options for Taxpayers with an AFS for the DMSH

Extensive Word documents of 27 pages to assist clients in documenting or creating its Capital Asset Policies and Procedures. This is not required for tax purposes and is therefore provided to assist CPAs in man-agement advisory services.

11/25/13

Section 10 Work Programs

10.a.1

[Note: al-

Client Work Pro-gram for TPR Procedures – Large Client

25 page Word document This form is de-signed to assist the CPA in addressing the tangible property regulation (TPR) issues for his or her large clients for:• Internal tracking issues for the CPA

12/26/2013

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ternatively, for a shorter form, look at 1.b.2 “Tangible Property Regulation Suggested Action Items for Tax Year 2013 Checklist”]

firm• External compliance form filing for

the client, includingo Annual tax electionso Form completion for the

client’s current year tax fil-ing

o 3115 form completion ▪ For method

changes and prior year tax adjust-ments desired

▪ For method changes only

▪ For method change and prior year tax adjustments re-quired for depreci-ation corrections

• Required capitalization policies that the client must have in place in order to take advantage of the TPR de min-imis safe harbor

• Additional capitalization policies that the CPA can assist the client in re-lated to fixed assets, capitalization is-sues, repair and maintenance, depre-ciation, and material and supplies

10.b.1. Examples of What can go Wrong, and Re-lated Processes that Address What can go Wrong: Fixed Assets, M & S, Capitalization, R & M, and De-preciation

14 page Word document. This document is designed to assist the CPA in document-ing and/or testing the client’s Processes over these subject matters. [Note: if the client needs more detailed analysis of their processes over these issues, this form can assist in that process.]

1/05/2014

10.c.1. Understanding Client’s Internal Controls over Fixed Assets, Material & Sup-plies, Capital-ization, Repairs & Maintenance, and Deprecia-tion

Form is designed to assist the CPA in: An-alyzing a client’s current policies, docu-mentation, and controls over fixed assets, material & supplies, capitalization and re-pairs and maintenance, and depreciation for both tax and financial statement (FS) purposes. [Note if the CPA or client only desires to document the tax controls, ig-nore or do not complete the sections or parts that are marked “for FS purposes”.]

09/04/2014

Section 11 Miscellaneous

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11.a.1. TPR Firm Logis-tic Outline

In Word. Details the complete issues, ac-tions, processes that a CPA firm needs to address related to the logistics issues that a CPA facts in

10/17/2014

11.b.1. 481(a) Adjust-ment – the Rules for Net-ting

In Word. Describes the rules and nuances of concurrent and non-concurrent 481(a) adjustments and provides a detailed exam-ple.

10/19/2014

Section 12. Elections12.a.1 De minimis safe

harbor election to attach to tax re-turn

Final TPR required election if a taxpayer desires to election the DMSH for 2013 or 2014 (and all tax years beyond 2014)

1/03/2014

12.b.1 Election to capi-talize employee or overhead costs

Election process for this method (infre-quent)

1/03/2014

12.c.1 Election to capi-talize M & S costs

Final TPR election if a taxpayer desires to capitalize certain M & S

1/03/2014

12.d.1 Election to capi-talize R & M costs

Final TPR election if a taxpayer desires to capitalize certain R & M

1/03/2014

12.e.1 Partial asset dis-position election

Process that a taxpayer needs to follow to be able to take a partial asset disposition

1/03/2014

12.f.1 Small taxpayer safe harbor elec-tion to attach to tax return

Final TPR election that needs to be at-tached to a tax return for 2013, 2014, and all subsequent tax years if a taxpayer wants to take the SHST election

1/03/2014

Section 13. TPR Communications by Eric Wallace

13.1 Memo on DMSH Elections when capitalization pol-icy exceeds the safe harbor

Addresses and answers the issue of when a TP’s capitalization policy exceeds the de minimis safe harbor amounts and the filing of the DMSH annual election applicability

2/8/2014

13.2 Memo on the "must file" 3115s

Memo that covers what methods must be filed and what are optional for 2013/2014 and where these are located in the Share-File

1/26/2015

13.3 Memo on the What, When, Where and How to Mail TPR 3115s

Memo on the details on the proper mailing addresses and processes on filing all of the TPR related 3115s. [updated for RP 2015-13]

1/26/2015

13.4 Latest Updates on RP 2014-17 - Stop and read this please

Memo on the current status of filing re-quirements for methods 175 to 195

3/5/2014

13.5 Memo on is- The IRS released the final MACRS dispo- 1/26/2015

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suance of Final MACRS Disposi-tion regulations on August 14, 2014

sition regulations. This memo summarizes the details of this release and what has changed from the proposed MACRS dis-position regulations

13.6 Memo on is-suance of Final MACRS Disposi-tion method changes

Memo issued on TPR updates 10/1/2014

13.7 Memo on Prior Year PADs Be-tween Related Parties

The issue of prior year partial asset dispo-sitions (PADs) is one that many are strug-gling with. In a typical related party rental situation A owns the real estate, which is rented to the operating entity B, and both are owed by I. In this relationship the op-erating entity B has paid for prior building structure(s) or building system(s) but B does not have the original building struc-ture or building system on its depreciation schedule, A does. The TPR question is what can be done so that A can do a PAD on the asset that is on B’s depreciation schedule. The following is a discussion and guide on how to get that done.

11/10/2014

13.8 Memo on Non-Profits and the Required TPR Fil-ings

This memo describes the applicability of the TPRs to Non-profits who are required to file 990Ts. Executive Summary: they are required to file the same 3115s.

11/10/2014

13.9 481(a) Adjust-ments for Reg., AMT, and State Purposes

This memo describes where the regular tax 481(a) are required to be reported for all tax form types as well as AMT 481(a) ad-justments and state differences.

11/10/2014

13.10 Materiality Com-parisons When Doing Deprecia-tion Scrubbing for the TPRs

This memo provides guidance and source documentation on how to compare the dol-lar amounts on the taxpayer’s depreciation schedule to the Unit of Property and how to note or record your conclusions on that.

11/10/2014

13.11 Unit of Property Statements for Buildings and Land Improve-ments

This memo provides the reasons for the re-quired U of P statements that must be filed for all buildings in its #184 filing and the notation that can be recorded in the tax-payer’s depreciation scrubbing efforts. It also presents and describes the opportunity for “rolling” or changing U of P definition that anticipates future building or land im-provement U of P changes.

11/10/2014

13.12 Unit of Property Considerations for Buildings

This memo explores the source documents and requirements for the U of P and build-ing structures and systems.

11/10/2014

13.13 Unit of Property Considerations

This memo clarifies that unit of property for landlord tenant improvements is not a

12/08/2014

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for Landlord Ten-ant Improve-ments

separate unit of property

13.14 Form 3115, Part IIQuestions 9 and 10 – How to Com-plete

There is confusion as to how to answer Questions 9 and 10 of Form 3115, Part II. This memo clarifies what and when to complete each of these questions.

1/26/2015

13.15 Who Must File and What Situa-tions are “Identi-cal” 3115 Filings Filings

Many attempt to file consolidated 3115s (i.e. for the parent and sub or for SM-LLCs) for “identical” 3115 filings. This memo summarizes the criteria required in order to file consolidated 3115s. Bottom line: filing consolidated 3115s requires certain criteria that very few taxpayers will meet.

12/08/2014

13.16 Definition of Busi-ness Activity of Rev. Prov. 87-56: How to Deter-mine the Asset Activity Class if the Taxpayer has Multiple Business Activities

When taxpayers have multiple business activities the assets must be depreciated over the proper asset class. This memo ex-plores the rules and tax documents that govern the final determinations.

12/08/2014

13.17 Non-recourse debt and Manda-tory PADs

The preamble to and the regulations of 1.168(i)-8(e) state that an abandonment of a partial asset is optional for all taxpayers unless the unit of property is secured by non-recourse debt. This memo reviews those rules and provides examples of its application and also presents a practice note on an alternative view of the man-date.

1/23/2015

13.18 Related Parties and the Form 3115 Required Disclosures of Question 9

Form 3115, question 9 requires a taxpayer to file details of its other 3115 method changes as well as its related party method change filings, for the current and prior 5 year filings. This memo describes the re-quirements of the 3115 form, the related party rules of section 267 and alternatives for presentation in your 3115 attachment.

1/23/2015

13.19 Carpet and the Unit of Property Rules

In process

13.20 Section 1231 and Partial or Prior Asset Disposi-tions

This memo covers the issue of whether partial or prior asset dispositions required the reporting of the related loss as a 1231 loss. They do not. Support is provided for this conclusion

1/26/2015

13.21 Summary of the Key Points and

This 15 page Word file summarizes the key points of RP 2015-13. RP 2015-13 re-placed RP 2011-14 as the main automatic

1/26/2015

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Purpose of the Is-suance of RP 2015-13

(and non-automatic) method change docu-ment.

13.22 Summary of the Ability to File the Automatic Meth-ods in the Final Year of the Tax-payer

This is an analysis of, and related citations on, whether the automatic methods can be filed in the final year of an entity. Conclu-sion: all can be filed but #21 on removal costs.

1/26/2015

13.23 Listing of RABI Criteria

Each of the TPR criteria of restoration, adaption, betterment and improvement are listed in detail.

1/25/2015

Section 14. Completed 3115 Exam-ples

14.1 Completed 3115 Example for a method #7 filing

This is a completed example 3115 includ-ing the 3115 (14.1.A.), the attachment (14.1.B.) and the 481(a) Schedule of the #7 changes in Excel (14.1.C.). This exam-ple better enables a preparer to see what the final product should look like for this method filing.

3/10/2014

14.2 Example 481(a) Schedules for Calculating 481(a) Adjust-ments

Excel file with two tabs showing calcula-tions and example 481(a) schedules

3/17/2014

Section 15. Addresses and Processing of 3115s

15.1 Addresses for Mailing of the 3115s

Taxpayers should mail all of the TPR au-tomatic method completed 3115s to Og-den, UT. This tool lists those addresses and related rules.

1/25/2015

15.2 Signature Details and Issues for the 3115s

From a 1040 to P, Ss, to Estates, there are signature requirements. Consult this form for those details.

5/19/2014

15.3 Original or Copy, Signature or Not Details for filing of the 3115s

3115 filers must be certain to get the rules about where the original or copy of the 3115s must be filed

1/25/2015

15.d. Graph of Details of TPR Completed 3115 Filing Re-quirements

One Page Excel file that details out the how, what, where of the signature and fil-ing requirements of the TPR 3115 submis-sions

1/25/2015

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