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NSBN LLP
1925 Century Park East, 16th Floor
Los Angeles, California 90067

310.273.2501

310.859.0374


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IRS Releases NEW De Minimis Safe Harbor Threshold

December 15, 2015

IRS Releases NEW De Minimis Safe Harbor Threshold

On November 24, 2015, the IRS released Notice 2015-82 which raises the de minimis safe harbor limit, as provided in the Tangible Property Regulations, from $500 to $2,500. Expenditures supported by an invoice, which might otherwise be capitalized and depreciated, may be expensed as long as the cost of the item does not exceed $2,500. Whether the form of business is a corporation, a partnership, an LLC, a sole proprietorship (Schedule C on an individual return), or a rental property (Schedule E on an individual return), this new threshold applies.

The new $2,500 threshold takes effect starting with tax year 2016. However, the IRS will provide audit protection to eligible taxpayers by not challenging the use of the new $2,500 threshold in tax years prior to 2016.

Updating Your Capitalization Policy

Before filing your 2015 tax return, you should review your capitalization policy in consideration of the increased safe harbor threshold. This may provide you with potential tax saving opportunities.

Please contact us for assistance with updating or developing your capitalization policy.

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NSBN LLP
1925 Century Park East, 16th Floor
Los Angeles, CA 90067

(310) 273-2501