Many taxpayers are overwhelmed as they contemplate how their company can possibly comply with the tangible property regulations last December. This session offers insights.
4. Presenters
► Scott Wilson ► Brendan Cox
Roche Diagnostics Corporation Ernst & Young LLP
Philadelphia, PA
+ 1 215 448 5049
► Brandon C. Carlton brendan.cox@ey.com
Ernst & Young LLP
Washington, DC ► Daren Campbell
+ 1 202 327 6826 Ernst & Young LLP
brandon.carlton@ey.com Washington, DC
+ 1 202 327 6539
daren.campbell@ey.com
Page 4 Complying with the tangible property regulations: Mission impossible?
5. Agenda
► Level-set
► Procedural background and outlook
► High-level vision of the tangibles regulations
► Key implementation hotspots
► De minimis rule/materials and supplies
► Dispositions/general asset accounts
► Repairs versus improvements
► How to move forward
► Priority implementation issues
► Other considerations
Page 5 Complying with the tangible property regulations: Mission impossible?
7. Procedural background and outlook
► Temporary regulations issued (December 2011)
► Final regulations anticipated in 2013
► Transition guidance issued (March 2012)
► Provides 19 new automatic method changes
► Scope limitations waived for 2012 and 2013
► Compliance with Section 263A generally required
► Large Business & International (LB&I) Directive
issued (March 2012)
► Stand-down order on most repairs and associated
dispositions issues
► Notice 2012-73 (November 2012)
Page 7 Complying with the tangible property regulations: Mission impossible?
8. High-level vision of the tangibles regulations
Materials and Acquisitions Improvements Depreciation
supplies and dispositions
§ 1.162-3T § 1.263(a)-2T § 1.263(a)-3T §§ 1.168(i)-1T,-7T,-8T
§ 1.263(a)-1T
► Definition of materials and ► Capitalized costs include ► Unit of property (UOP) is ► Dispositions
supplies costs that facilitate generally all functionally ► General rules
acquisition of property inter-dependent property ► Required to recognize
► Three categories of ► Whether and which test except for: disposition of structural
deductibility: for real property ► Buildings components
► Incidental ► May expense employee ► Plant property ► Reasonable
► Non-incidental comp. and overhead ► Leased property identification methods
► Rotable spare parts
► De minimis rule: follow ► Improvement defined: ► Allowed vs allowable issue
► Election to deduct under applicable financial ► Betterment
de minimis rule statement (AFS) ► Restoration ► General asset accounts
expensing up to ceiling ► New or different use ► Flexibility to recognize
► Election to capitalize and (applied to each regarded (or not) dispositions of
depreciate entity) ► Safe harbor for routine assets
► Greater of: maintenance on property ► Annual election
► 0.1% of tax gross other than buildings ► One-time retroactive
receipts, or election
► 2.0% of book ► Safe harbor for certain
depreciation/ regulated entities
amortization
► Election to capitalize ► No plan of rehabilitation
and depreciate
► Remember: coordination with Section 263A required for most changes; several “sleeper” elections.
Page 8 Complying with the tangible property regulations: Mission impossible?
9. Notice 2012-73
Notice 2012-73 (issued 11/20/12) announced:
► Temporary regulations (currently effective for tax years beginning on or
after 1/1/12):
► Will be modified to be effective for tax years beginning on or after
1/1/14
► May be optionally applied for tax years beginning on or after 1/1/12
► Optional early application may be done piecemeal
► Final regulations:
► Are anticipated to be published in 2013
► Will be effective for tax years beginning on or after 1/1/14
► May be optionally applied for tax years beginning on or after 1/1/12
► Will include modifications to de minimis rule, dispositions rules and
the routine maintenance safe harbor
Page 9 Complying with the tangible property regulations: Mission impossible?
11. De minimis rule/materials and supplies
De minimis rule Materials and supplies
Treas. Reg. § 1.263(a)-2T(g) Treas. Reg. § 1.162-3T
► Can follow book de minimis ► Incidental
expense policy if: Deduct when paid
1) Have applicable financial
statement ► Non-incidental
2) Have written book policy Deduct when used
3) Deduct pursuant to book
policy Elect to deduct ► Rotable and spare parts
4) Less than a ceiling (by under de minimis rule Deduct when disposed or use
taxable entity) of the if ceiling allows optional method of accounting
greater of:
0.1% of tax gross ► Elect to capitalize and
receipts depreciate
or
2.0% of book
depreciation and
amortization
► Elect to capitalize and
depreciate
Page 11 Complying with the tangible property regulations: Mission impossible?
12. Example flowchart
Yes No
Book capitalizes tangible property?
Supply,
Analyze fixed assets for potential What is character (i.e., gain/loss account)
repair,
deductibility for tax for book expense?
other
Can the property be classified as a tax
M&S Repair
expense such as
1. UOP < $100
2. UOP with economic life < 12 months Yes — IF Options
3. Fuel, water lubricants consumed in < 12 months M&S
4. Component to maintain, repair, improve a UOP No total $
5. Other identified guidance limitation
Capitalize M&S
No
Rotable or temporary
Incidental (deduct when Non-incidental (deduct
parts (deduct when
acquired) when used/consumed)
disposed) Depreciate
Yes — IF
UOP not improved Repair?
No total $
limitation
Deduct No
Has AFS, follows written book policy, and deducts for book Yes — IF
De minimis rule?
Subject to a ceiling — the greater of: 0.1% of tax gross receipts or
2.0% of total book depreciation and amortization Total $ limited
to ceiling ► No
► Amounts above ceiling
Capitalize and
Deduct up to ceiling
depreciate
Amounts above ceiling
Page 12 Complying with the tangible property regulations: Mission impossible?
13. Tackling implementation
De minimis rule and materials and supplies
1. Calculate ceiling
2. Compare aggregate amount expensed under book policy
3. If overage, remove amounts deductible under other provisions
4. If overage remains, determine what to capitalize
Expensed amount
Incidental M&S
Non-incidental M&S (used only)
B Repairs costs
De minimis ceiling Capitalize
A
Page 13 Complying with the tangible property regulations: Mission impossible?
14. Example — de minimis rule
► “A Corp.” historically deducts for tax all amounts it
expenses for financial purposes. A Corp’s exam team
has always agreed not to consider amounts under
US$2,500 in its audit.
► Does A Corp. need to make a change to use the de
minimis rule under the tangibles regulations?
Page 14 Complying with the tangible property regulations: Mission impossible?
15. Example — de minimis rule and materials
and supplies
► A Corp. decides to make a method change to use the de
minimis rule under the tangibles regulations. It has a
book policy of expensing amounts under US$2,500 and
simply deducts the cost of most materials and supplies.
► How can A Corp. follow the new law but do the least
amount of work?
Page 15 Complying with the tangible property regulations: Mission impossible?
16. Dispositions
T.R. § 1.168(i)-1T and T.R. § 1.168(i)-8T
► Includes the sale, exchange, retirement, physical
abandonment or destruction of an asset
► Now includes the retirement of structural components of
a building
► Must use a reasonable valuation method that is
consistently applied
► Basis issues with respect to allowed or allowable
depreciation
Page 16 Complying with the tangible property regulations: Mission impossible?
17. Dispositions/general asset accounts
T.R. § 1.168(i)-1T and T.R. § 1.168(i)-7T
General asset account
New default
(GAA)
When a component is If elected to include in a GAA:
disposed of:
1. Continue to depreciate
asset as if still owned
1. Stop depreciating the
component 2. Recognize ordinary gain
on amount realized
2. Must recognize gain/loss or
3. Optionally recover basis:
3. Use reasonable basis to ► For qualifying dispositions,
determine tax basis of or
disposed asset ► On disposing of last item in
GAA
Page 17 Complying with the tangible property regulations: Mission impossible?
18. Example — dispositions
► “B Corp.,” a manufacturer, owns buildings and production
equipment. B Corp. does not currently track dispositions
of structural components of buildings or of most
components of its production equipment. However,
occasionally, B Corp. does recognize a loss on the
disposal of some production equipment parts.
► Should B Corp. make a general asset election? If so,
what should it include? What are the pros and cons?
Page 18 Complying with the tangible property regulations: Mission impossible?
19. Improvements
Step 1 — determine unit of property
► General rule
► Functional inter-dependence
► Exceptions
► Buildings — single unit, but analyze …
Building structure plus eight defined building systems
► Plant property
Discrete and major function within the functionally inter-dependent
machinery or equipment
► Network assets
Facts and circumstances or published guidance
► Leased property and leasehold improvements
Page 19 Complying with the tangible property regulations: Mission impossible?
20. Improvements
Unit of property for buildings — T.R. § 1.263(a)-3T
Heating, ventilation Fire protection
and air conditioning
(HVAC)
Structure: Security systems
Plumbing ► Roof
► Walls
► Windows Elevator systems
Electrical
Escalator systems
Gas distribution
Page 20 Complying with the tangible property regulations: Mission impossible?
21. Improvements
Step 2 — apply improvement rules
Betterment? Restoration? New or
► Correct pre-existing ► Replace component for which different use?
material condition loss claimed
► New use inconsistent
or defect ► Repair damage related to with intended use when
► Results in material claimed casualty loss originally placed in
addition service
► Replace component for which
► Results in material basis adjusted in gain/loss
increase in capacity,
► Repair unit of property (UOP)
strength, quality
to ordinarily efficient operating
or output
condition from state of
disrepair
► Rebuild UOP to “like-new”
condition at end of class life Potentially
► Replace major component or otherwise
substantial structural part of deductible
UOP
Yes No Yes No Yes No
Capitalize Capitalize Capitalize
Page 21 Complying with the tangible property regulations: Mission impossible?
22. Improvements
Routine maintenance safe harbor — T.R. § 1.263(a)-3T
► Must reasonably expect to perform the activity more than
once during property’s class life
► Must be able to keep asset in its ordinary and efficient
operating condition
► Replace parts with comparable and commercially available and
reasonable replacement parts
► Does not apply if:
► Taxpayer takes a loss on removed components, takes a casualty
loss or includes adjusted basis of removed component in gain, or
loss on sale of component
► Put property into use from a state of disrepair
► Does not apply to buildings
Page 22 Complying with the tangible property regulations: Mission impossible?
23. Example — improvements
► “C Corp.” currently deducts all repair/maintenance activity
costing less than US$5,000 on its manufacturing line.
C Corp. would like to continue to follow this method for
tax.
► Can C Corp. continue to deduct repair/maintenance costs
pursuant to its book policy?
Page 23 Complying with the tangible property regulations: Mission impossible?
25. Priority implementation issues
► Financial reporting
► Consider possible method changes and timing
considerations
► Optional application of temp/final rules in 2012, 2013 or 2014
► Section 263A Uniform Capitalization (UNICAP)
requirement
► The risks of doing nothing until the 2014 tax year
Page 25 Complying with the tangible property regulations: Mission impossible?
26. Other considerations
► Collateral federal tax effects
► Fixed assets/cost segregation
► Impact on Section 199 deduction
► Impact on earnings and profits from controlled
foreign corporations
► Impact on state and local tax
► Apportionment factors
► Personal property taxes
► Impact on systems and processes
Page 26 Complying with the tangible property regulations: Mission impossible?
27. Possible systems changes
► General fixed asset system changes
► Systems modifications may be needed depending on the capitalization
and depreciation rules created for the former regulations.
► Master data review of fixed assets could be beneficial to:
► Review bonus depreciation
► Incorporate topside adjustment schedules
► Eliminate side schedules
► Clean-up deferred tax reconciliation
► Materials and supplies
► Additional accounts may be added to the general ledger to clearly
separate material and supply expenditures from other expenditures.
► Analysis tools or queries may be developed to automate the process for
filtering material and supply expenditures to determine whether or not
book expenses must be capitalized for tax.
Page 27 Complying with the tangible property regulations: Mission impossible?
28. Possible systems changes (cont.)
► Acquisitions
► Upstream systems may be configured to flag differences in
acquisition costs between book and tax.
► Improvements
► Assets may be divided into business systems.
► Upstream systems may be configured to flag deductible
repair expenditures.
► Special depreciation keys may need to be established to
appropriately record repair expenditures.
► Depreciation and dispositions
► Information fields may need to be established or populated to track
general asset accounts.
► Special transaction codes may need to be established to allow for
tax-only dispositions.
Page 28 Complying with the tangible property regulations: Mission impossible?
30. Rev. Proc. 2012-19
Materials and supplies
Description of Appendix § § 481 vs
method change change # cut-off Notes
Deducting incidental § 3.13 Cut-off in 2012; Change to deduct incidental materials and supplies in the taxable
materials and supplies #165 modified § 481 year in which they are paid or incurred
when paid or incurred in future Notes A, B, C, D and E
Deducting non-incidental § 3.14 Cut-off in 2012; Change to deduct non-incidental rotable and temporary spare
rotable and temporary #166 modified § 481 parts in the taxable year in which the taxpayer disposes of
spare parts when in future the parts
disposed Notes A, B, C, D, and E
Change to the optional § 3.15 § 481 Change to use the optional method of accounting for rotable and
method for rotable spare #167 temporary spare parts
parts Notes A, B, C, D and E
Deducting non-incidental § 3.12 Cut-off in 2012; Change to deduct non-incidental materials and supplies in the
materials and supplies #164 modified § 481 taxable year in which they are actually used or consumed
when used or consumed in future Does not apply to rotable or temporary spare parts
Notes A, B, C, D and E
Note A: Must be in compliance with § 263A for the costs subject to the method change or file concurrent § 263A change
Note B: Should be combined on one Form 3115 with §§ 1.162-3T, 1.162-4T, 1.263(a)-1T, 1.263(a)-2T and 1.263(a)-3T and, if
applicable, should be combined on one Form 3115 with concurrent change under § 263A
Note C: Scope limitations in Section 4.02 of Rev. Proc. 2011-14 are waived for the first and second taxable year beginning after
December 31, 2011
Note D: Form 3115 filed with Ogden, UT in lieu of IRS National Office
Note E: Addresses use of statistical sampling using Rev. Proc. 2011-42 to determine § 481 adjustment and to support items on
income tax returns
Page 30 Complying with the tangible property regulations: Mission impossible?
31. Rev. Proc. 2012-19
Sales costs
Description of Appendix § § 481 vs
method change change # cut-off Notes
Deducting dealer § 3.16 § 481 Change for a dealer in property to treat costs paid or incurred to
expenses that facilitate #168 facilitate the sale of tangible property as ordinary and necessary
the sale of property business expenses
Notes A, B and C
Capitalizing non-dealer § 10.08 § 481 Change to capitalize costs to facilitate the sale of tangible
expense to facilitate the #172 property for taxpayers that are not dealers in such property
sale of property Notes A, B and C
Note A: Should be combined on one Form 3115 with §§ 1.162-3T, 1.162-4T, 1.263(a)-1T, 1.263(a)-2T and 1.263(a)-3T and, if
applicable, should be combined on one Form 3115 with concurrent change under § 263A
Note B: Scope limitations in Section 4.02 of Rev. Proc. 2011-14 are waived for the first and second taxable year beginning after
December 31, 2011
Note C: Form 3115 filed with Ogden, UT in lieu of IRS National Office
Page 31 Complying with the tangible property regulations: Mission impossible?
32. Rev. Proc. 2012-19
Acquisition costs and de minimis rule
Description of Appendix § § 481 vs
method change change # cut-off Notes
Deducting de minimis § 3.17 Cut-off in 2012; Change to apply the de minimis rule for amounts paid or incurred
amounts #169 modified § 481 to acquire or produce property
in future Does not apply to inventory, land or § 195 expenditures
Notes A, B, C and D
Capitalizing acquisition or § 10.09 § 481 Change to capitalize amounts paid or incurred to acquire or
production costs #173 produce property, including costs described in § 1.263(a)-2T(e)
and (f) and ,if applicable, depreciate such property
Must complete Schedule E of Form 3115
Notes A, B, C, D and E
Deducting certain costs § 3.18 Cut-off in 2012; Change to deduct certain amounts paid or incurred in the process
for investigating or #170 modified of investigating or otherwise pursuing the acquisition of real
pursuing the acquisition of § 481 in future property or a change solely for employee compensation and
real property overhead related to such investigatory costs
Does not apply to § 195 expenditures
Notes A,B, C and D
Note A: Must be in compliance with § 263A for the costs subject to the method change or file concurrent § 263A change
Note B: Should be combined on one Form 3115 with §§ 1.162-3T, 1.162-4T, 1.263(a)-1T, 1.263(a)-2T and 1.263(a)-3T and, if
applicable, should be combined on one Form 3115 with concurrent change under § 263A
Note C: Scope limitations in Section 4.02 of Rev. Proc. 2011-14 are waived for the first and second taxable year beginning after
December 31, 2011
Note D: Form 3115 filed with Ogden, UT in lieu of IRS National Office
Note E: Addresses use of statistical sampling using Rev. Proc. 2011-42 to determine § 481 adjustment and to support items on
income tax returns
Page 32 Complying with the tangible property regulations: Mission impossible?
33. Rev. Proc. 2012-19
Improvements
Description of Appendix § § 481 vs
method change change # cut-off Notes
Deducting repairs and § 3.10 § 481 Change from capitalizing to deducting repairs and maintenance
maintenance costs #162 costs; also includes change in units of property
Does not include property subject to a repair allowance election
for year in the election was made
Notes A, B, C, D and E
Change to the regulatory § 3.11 § 481 Change for certain regulated taxpayers to follow regulatory
accounting method #163 method for determining whether amounts improve property
Does not include property subject to a repair allowance election
for year the election was made
Addresses use of statistical sampling for § 481 adjustment only
Notes A, B, C and D
Note A: Must be in compliance with § 263A for the costs subject to the method change or file concurrent § 263A change
Note B: Should be combined on one Form 3115 with §§ 1.162-3T, 1.162-4T, 1.263(a)-1T, 1.263(a)-2T and 1.263(a)-3T and, if
applicable, should be combined on one Form 3115 with concurrent change under § 263A
Note C: Scope limitations in Section 4.02 of Rev. Proc. 2011-14 are waived for the first and second taxable year beginning after
December 31, 2011
Note D: Form 3115 filed with Ogden, UT in lieu of IRS National Office
Note E: Addresses use of statistical sampling using Rev. Proc. 2011-42 to determine § 481 adjustment and to support items on
income tax returns
Page 33 Complying with the tangible property regulations: Mission impossible?
34. Rev. Proc. 2012-19
Improvements
Description of Appendix § § 481 vs Notes
method change change # cut-off
Change to the safe harbor § 3.19 Modified Change to apply the routine maintenance safe harbor method,
for routine maintenance #171 § 481 which does not apply to buildings
on property other Notes A, B, C, D and E
than buildings
Capitalizing improvements § 10.10 § 481 by Class Change to capitalize amounts paid or incurred for improvements
to tangible property #174 life to units of property, and, if applicable, depreciate such
improvements
Does not include property subject to a repair allowance election
for year the election was made
Must complete Schedule E of Form 3115
Notes A, B, C, D and E
Note A: Must be in compliance with § 263A for the costs subject to the method change or file concurrent § 263A change
Note B: Should be combined on one Form 3115 with §§ 1.162-3T, 1.162-4T, 1.263(a)-1T, 1.263(a)-2T and 1.263(a)-3T and, if
applicable, should be combined on one Form 3115 with concurrent change under § 263A
Note C: Scope limitations in Section 4.02 of Rev. Proc. 2011-14 are waived for the first and second taxable year beginning after
December 31, 2011
Note D: Form 3115 filed with Ogden, UT in lieu of IRS National Office
Note E: Addresses use of statistical sampling using Rev. Proc. 2011-42 to determine § 481 adjustment and to support items on
income tax returns
Page 34 Complying with the tangible property regulations: Mission impossible?
35. Rev. Proc. 2012-20
Depreciation
Description of Appendix § § 481 vs
method change change # cut-off Notes
Depreciation of leasehold § 6.27 § 481 — option Changes comply with § 1.167(a)-4T for leasehold improvements
improvements #175 for one net in which the taxpayer has a depreciable interest at the beginning
adjustment or of the year of change
may have two Section 4.02(5) of RP 2011-14 does not apply
adjustments by Special rules for public utility property
separating Note A, B, C and D
negative and
positive
Permissible to permissible 6.28 Some changes Change from permissible to permissible depreciation methods
method of accounting for #176 are modified under § 168 for certain assets owned by the taxpayer at the
depreciation of MACRS cut-off; some beginning of the year of change
property cut-off; some Must be combined on one Form 3115 with #177
§ 481 Must complete Schedule E of Form 3115
Statistical sampling for § 481 adjustment
Section 4.02(5) of RP 2011-14 does not apply
Notes A, C and D
Note A: Must be in compliance with § 263A for the costs subject to the method change or file concurrent § 263A change
Note B: Should be combined on one Form 3115 with concurrent change under § 263A
Note C: Scope limitations in Section 4.02 of Rev. Proc. 2011-14 are waived for the first and second taxable year beginning after
December 31, 2011
Note D: Form 3115 filed with Ogden, UT in lieu of IRS National Office
Note E: Addresses use of statistical sampling using Rev. Proc. 2011-42 to determine § 481 adjustment and to support items on
income tax returns
Page 35 Complying with the tangible property regulations: Mission impossible?
36. Rev. Proc. 2012-20
Dispositions
Description of Appendix § § 481 vs
method change change # cut-off Notes
Disposition of a building or § 6.29 § 481 — option Change to the appropriate asset for dispositions of buildings and
structural component #177 for one net structural components
adjustment or Must be combined on one Form with certain 176
may have two Must complete Schedule E of Form 3115
adjustments by Statistical sampling for § 481 adjustment
separating No ruling on asset
negative and Section 4.02(5) of RP 2011-14 does not apply
positive Notes A, B, C and D
Dispositions of tangible § 6.30 § 481—option Change to the appropriate asset for disposition of § 1245 property
depreciable assets (other #178 for one net or a depreciable land improvement
than a building or its adjustment or No ruling on asset
structural components) may have two Notes A, B, C and D
adjustments by
separating
negative and
positive
Note A: Must be in compliance with § 263A for the costs subject to the method change or file concurrent § 263A change
Note B: Should be combined on one Form 3115 with concurrent change under § 263A
Note C: Scope limitations in Section 4.02 of Rev. Proc. 2011-14 are waived for the first and second taxable year beginning after
December 31, 2011
Note D: Form 3115 filed with Ogden, UT in lieu of IRS National Office
Note E: Addresses use of statistical sampling using Rev. Proc. 2011-42 to determine § 481 adjustment and to support items on
income tax returns
Page 36 Complying with the tangible property regulations: Mission impossible?
37. Rev. Proc. 2012-20
Dispositions and general asset accounts
Description of Appendix § § 481 vs
method change change # cut-off Notes
Dispositions of tangible § 6.31 § 481 Change to the appropriate asset disposed of or the method of
depreciable assets in a #179 identifying which assets have been disposed of for assets for
general asset account which the taxpayer made a valid general asset account election;
special rules for making the change including description
of the assets
Notes A, B, C and D
General asset account § 6.32 § 481 with Change to make a late general asset account election, a late
elections #180 modified cut-off election to recognize gain or loss upon the disposition of all the
in certain assets or the last asset in a general asset account, or a late
situations election to recognize gain or loss upon the disposition of an asset
for which the taxpayer made a valid general asset account
election.
This change only applies for the taxpayer’s first or second taxable
year beginning after December 31, 2011; after that, the making of
a late election will not be considered a change in method of
accounting
Notes C, D
Note A: Must be in compliance with § 263A for the costs subject to the method change or file concurrent § 263A 3115
Note B: Should be combined on one Form 3115 with concurrent change under § 263A
Note C: Scope limitations in Section 4.02 of Rev. Proc. 2011-14 are waived for the first and second taxable year beginning after
December 31, 2011
Note D: Form 3115 filed with Ogden, UT in lieu of IRS National Office
Note E: Addresses use of statistical sampling using Rev. Proc. 2011-42 to determine § 481 adjustment and to support items on
income tax return
Page 37 Complying with the tangible property regulations: Mission impossible?
38. Tangibles regulations elections to be made
on the 2012 tax return
Asset by asset Revocation, if
Election or overall? How election made allowed
Capitalize and depreciate materials Asset by asset No statement required; treatment on Private letter ruling
and supplies timely filed original return constitutes showing good cause
election
Deduct materials and supplies Asset by asset No statement required; treatment on Private letter ruling
under de minimis rule in Treas. Reg. timely filed original return constitutes showing good cause
§1.263(a)-2T(g) election
Capitalize and depreciate, rather Asset by asset No statement required; treatment on Private letter ruling
than deduct under de minimis rule in timely filed original return constitutes showing good cause
Treas. Reg. §1.263(a)-2T(g) election
Capitalize employee compensation Asset by asset No statement required; treatment on Private letter ruling
and overhead as amounts that timely filed original return constitutes showing good cause
facilitate an acquisition transaction election
General asset account Asset by asset Form 4562 on timely filed original return Irrevocable
Optional termination of a general Overall No statement required; treatment on Private letter ruling
asset account timely filed original return constitutes showing good cause
election
Optional determination of the Asset by asset No statement required; treatment on Private letter ruling
amount of gain, loss or other timely filed original return constitutes showing good cause
deduction for disposition from election
general asset account
Page 38 Complying with the tangible property regulations: Mission impossible?