Webinar: Overview of the Final Repair and Capitalization Regulations

February 18, 2015

Webinar on Sorting Out the Confusion and the Myths - The Final Treasury Regulations on Repairs and Capitalization

February 18, 2015 - 10:00 am to 11:40 am (Central Time)

**If you were unable to attend the webinar, we will have a replay of it available on TaxPlace.  You must be a subscriber to watch the replay.  To learn more about TaxPlace: https://www.calt.iastate.edu/taxplace

The implementation of the final regulations has generated a lot of confusion as to their application to farmers, ranchers and other small businesses.  Join Roger A. McEowen, Director of the Center for Agricultural Law and Taxation in Ames, Iowa, and Paul G. Neiffer, CPA with CliftonLarsonAllen and author of FarmCPA Blog for a practical discussion of the final regulations and their application to your agricultural and other small business clients with this 100-minute CPE online seminar.  Roger and Paul will cut through some of the confusion, discuss how the final regs differ from previous temporary regs, identify where areas of potential confusion and controversy may still arise, and explain what your business or your clients must do now in the wake of these finalized regs.


In 2013, the IRS released final regulations that generally apply to tax years beginning on or after January 1, 2014, and removed certain temporary and proposed regulations governing the application of Code Secs. 162(a) and 263(a) to amounts paid to acquire, produce, or improve tangible property.  In addition, proposed regulations were issued under Code Sec. 167 regarding accounting for and retirement of depreciable property, as well as under Code Sec. 168 regarding accounting for property under the Modified Accelerated Cost Recovery System (MACRS) other than general asset accounts. The final regulations pertain to the acquisition, production, or improvement of tangible property.

The final regulations follow the format of temporary regulations that were issued in 2011 and can be broken down into the following sections:

  • Treas. Reg. §1.162-3 - Rules for materials and supplies;
  • Treas. Reg. §1.162-4 - Repairs and maintenance;
  • Treas. Reg. §1.263(a)-1 - General rules for capital expenditures;
  • Treas. Reg. §1.263(a)-2 - Rules for amounts paid for the acquisition or production of tangible property; and
  • Treas. Reg. §1.263(a)-3 - Rules for amounts paid for the improvement of tangible property.

Time will be provided to pose questions directly to the speakers. 

Program Topics

  • Materials and supplies - definitions of materials and supplies and the application to farm clients
  • Method for accounting for rotable and temporary spare parts
  • Discussion of the new de minimis rule and its changes
  • Repairs - deductions for amounts paid to repair and maintain property not required to be capitalized under 263(a)
  • Component unit building issues
  • Disposition of Assets
  • Acquire/produce tangible property - moving and installation costs; work performed prior to placing property into service and transaction costs and capitalization under the regs
  • What actually constitutes an accounting method change that requires Form 3115 to be filed
  • What being a "qualified taxpayer" actually means
  • Utilizing safe harbor elections and method changes
  • Distinguishing between farm clients and non-farm clients
  • Numerous examples
  • Sample Form 3115
  • Checklists

Learning Objectives

  • Understand the changes in tangible property treatment under the final regulations and the distinction between farm and non-farm clients
  • Identify how to utilize the safe harbor elections
  • Determine when Form 3115 must be filed
  • Understand how to utilize safe harbor elections
Continuing Education: 

This course provides continuing education for enrolled agents, CPAs, and other tax return preparers.

Total CPE Credits Earned: 2.0 (based on 1.0 credit hour per 50 minutes of instruction)

Please note: For those that are licensed (outside of the state of Iowa) by state boards/organizations should check with their respective boards/organizations to determine if credit applies toward continuing education requirements.  CALT does not apply for CPE in other states, but will we assist in the process to make sure you  receive your CPE credits. 


Roger McEowen is the Leonard Dolezal Professor in Agricultural Law in the Department of Agricultural Education and Studies and Director of the Center for Agricultural Law and Taxation at Iowa State University. He is a member of the Iowa and Kansas Bar Associations and is licensed to practice in Nebraska. He is widely published in law reviews and in other agricultural law publications and conducts agricultural tax and law seminars across the country.

Paul Neiffer is an Agribusiness Certified Public Accountant and is a Principal in the Agribusiness Group of CliftonLarsonAllen LLP. He is based out of Yakima, WA, and specializes in income taxation and accounting services related to farmers and processors. Paul authors a monthly column for Top Producer magazine and maintains a blog entitled “The FarmCPA” located at www.farmcpatoday.com.

CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.

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