Pub. 4 2013 Issue 4

winter 2013 9 West Virginia Banker If elected, costs that fall under the safe harbor may be treated as deductible in the taxable year paid or incurred, even if they would otherwise be considered improvement costs under the general rules. Dispositions of property The newly proposed regulations define the asset for disposition purposes to include the building (including all structural compo- nents). Additionally, there is an optional annual election in the year of disposition to recognize gain or loss on a partial disposi- tion of an asset. While this provides the opportunity to write off old building components (or components of nonbuilding assets) that have been replaced, it will require examining old records to determine or estimate the cost of the original components that were not previously accounted for separately. The proposed regulations provide guidance on this and also modify the rules governing dispositions of assets in general asset accounts. Change in accounting method Many provisions of the final and proposed regulations that a taxpayer chooses to early adopt for a taxable year beginning on or after Jan. 1, 2012, must be implemented by making an annual election on the taxpayer’s timely filed tax return. Additionally, the final regulations provide for a special transition rule for taxpayers that wish to make an election but have already filed their 2012 tax returns. Other provisions may require the filing of an Appli- cation for Change in Accounting Method (Form 3115). These significant method changes involve many nuances and options that require careful analysis. In order to comply with the final regulations by the 2014 tax year, impacted companies should act quickly to formulate an implementation and compliance plan and determine the optimal timing for making elections and filing required method change requests. This summary is intended to provide a high-level overview only and should not be relied on for application to specific fact pat- terns and situations. Taxpayers should consult their tax advisors to determine how the final regulations will apply to their specific facts and situations. For more information, please visit our website at: http://www.aftcpas.com/final-regulations-governing-tars. n Harry “Skip” Harless is a Member with Arnett Foster Toothman PLLC. He has over 23 years of public accounting experience, the last eighteen of which have been concentrat- ed in taxation. Skip was formerly the member-in-charge of the Arnett & Foster office in Martinsburg and as such worked with many closely held businesses, providing tax and busi- ness advice. Email: Skip.Harless@aftcpas.com Kevin Highlander is a Senior Manager with Arnett Foster Toothman PLLC and has over 12 years of experience solving complex tax matters for corpo- rations and partnerships. With a background in tax compliance, Kevin reg- ularly provides planning and consulting services for business clients. Kevin specializes in fixed assets and accounting method optimization for capital intensive business clients. Email: Kevin.Highlander@aftcpas.com The Correspondent Division of CenterState Bank employs over eighty dedicated correspondent professionals, and we manage over 615 relationships throughout the Southeastern United States. Capital Markets Services Portfolio Strategies Bond Accounting and Safekeeping BondRisk and SwapRisk Software Treasury Services  Brokered CDs  Repurchase Agreements  Federal Funds Accommodations  Derivative Instruments Asset/Liability Management Modeling and Consulting  Plansmith Bankers GPS - Call Report Model  FICast Sendero - Instrument - Level Model Bond School and Customized Educational Functions International Services Foreign Wire Transfers S.W.I.F.T. Messaging Foreign Currency and Travelers Checks Foreign Check Clearing Foreign Drafts Foreign Exchange Advisory Services Payment Solutions Cash Management  Converge (On - line Platform)  Sweep Account  Federal Funds Program 120 Club Oaks Court, Suite 150  Winston - Salem, NC 27104  336.659.7100  877.604.8282 www.csbcorrespondent.com As our customers and their communities expand and grow, CenterState Bank is committed to delivering innovative products and services that Include: