Cost of Tangible Property Regulations (TPRs) Noncompliance

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 Most real estate owners and investors find Tangible Property Regulations (TPRs) perplexing. Despite these regulations being a part of federal law for over a decade, many still face difficulties meeting IRS requirements. This confusion can lead to missed profit opportunities, heightened IRS risks, and challenges in depreciating assets.  

Taxpayer Reporting Standards (TPRs) are intricate, as the IRS employs various incentives and penalties to encourage compliance. Adhering to TPRs can result in substantial tax savings, as specific expenses may lower the taxable income for the year. Conversely, non-compliance can have serious repercussions, including the loss of deductions, the buildup of back taxes, and the incurrence of interest charges.

1. Immediate tax savings via safe harbor for repairs and maintenance and
2. Reducing annual income tax using generous expense deductions, thus
3. Reducing capital gains taxes when you sell your properties. 

1. $174,847,557 - Three Large Hotels
2. $29,562,836 - America’s largest family-owned Mall owner
3. $16,879,901 -  Large industrial building in MI
4. $6,474,740 -  Multi-unit apartments in Southern State
5. $4,046,046 -  Commercial buildings in Boston, MA

• Taxpayers must review and scrub depreciation schedules and eliminate improperly capitalized items. 
• We provide guidelines for building owners to determine whether to expense or capitalize (depreciate) property costs from 2014 forward. This applies to all taxpayers who have incurred costs for acquiring, improving, or producing tangible property.  

 TPR Noncompliance can result in the IRS denying past, present, and future depreciation claims, leading to substantial financial loss, penalties, and interest.

Email us your building depreciation schedule(s) and their addresses, and we will evaluate and quantify the value of TPRs. Let us walk our talk, and you can see your significant tax savings.