Issue link: http://read.dmtmag.com/i/267019
9 6 V I N E YA R D & W I N E RY M A N A G E M E N T | M a r - A p r 2 014 w w w. v w m m e d i a . c o m ture or one of the specified building systems, generally leading to increased capitalization. + There are several safe harbors available, including one for routine maintenance on building and non- building property such as equipment, as well as one for small taxpayers to deduct minor building repairs. For simplicity, you may also elect to capi- talize repairs for tax purposes if you're already capi- talizing them for financial statements by attaching an election statement to your return. + You may elect to recognize a loss on a partial dis- position of an asset. This would allow taxpayers to claim a loss upon the sale of a structural compo- nent (or a portion thereof) of a building or a com- ponent (or a portion thereof) of any other asset, without identifying the component as an asset before the disposition event. This beneficial elec- ow that 2014 is upon us, this is a good time to revisit significant tax developments and make our best predictions regarding future tax impacts important to vineyard and winery managers. More taxpayer-friendly final tangible property regula- tions were issued by the IRS in September 2013 and take effect for tax years beginning on or after Jan. 1, 2014. They apply to all taxpayers that acquire, produce or improve tangible property. Key points include: + An improvement to tangible property must gen- erally be capitalized. A unit of property has been improved when activities are performed after the property has been placed in service, which result in betterment, restoration or adaptation of the property to a new or different use. For buildings, the unit of property is either the building struc- BY JEFFREY L. SHILLING AND MICHAEL RICIOLI The final tangible property regulations issued by the IRS apply to all taxpayers that acquire, produce or improve tangible prop- erty. Photo: Thinkstock/ Nickolay Stanev