In Notice 2017-6 issued on December 20, 2016, the IRS has extended the waiver of the five-year eligibility limitation, by one year, on making automatic accounting method changes related to tangible property.
What this means is that taxpayers can file for an automatic accounting method change for tax years beginning before January 1, 2017 (previously beginning before January 1, 2016) — even if the taxpayer has requested or made the same change in the past five years.
The following are the applicable method changes included in the waiver extension:
Section 6.14, relating to a change from a permissible to another permissible method of accounting for depreciation of MACRS property under Sections 1.168(i)-1, 1.168(i)-7 and 1.168(i)-8, as applicable;
Section 6.15, relating to a change in method of accounting for dispositions of a building or structural component under Section 1.168(i)-8;
Section 6.16, relating to a change in method of accounting for dispositions of tangible depreciable assets (other than a building or its structural components) under Section 1.168(i)-8;
Section 6.17, relating to a change in method of accounting for dispositions of tangible depreciable assets in a general asset account under Section 1.168(i)-1; and
Section 11.08, relating to changes in methods of accounting for tangible property under the final tangible property regulations.
Talk with your advisers to see how this development may impact you.
Cohen & Company is not rendering legal, accounting or other professional advice. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts and circumstances.