Proposed regulations provide needed guidance on intangibles

✍ Scribed by Shirley Dennis-Escoffier

• Publisher: John Wiley and Sons
• Year: 2003
• Tongue: English
• Weight: 44 KB
• Volume: 14
• Category: Article
• ISSN: 1044-8136
• DOI: 10.1002/jcaf.10174

✦ Synopsis

The Treasury recently issued proposed regulations replacing INDOPCO's presumption of capitalization with an approach that favors deduction for many intangibles. These regulations may end the controversy created by the Supreme Court's decade-old ruling that expenses producing "future benefits of a significant nature" must be capitalized. In response to a request for simplification, the proposed regulations provide a list of items that must be capitalized. Expenses not on the list are presumed to be deductible. The proposed regulations also provide a 12-month rule for intangibles with relatively short useful lives and a $5,000 de minimis safe harbor, all very favorable to taxpayers.