New Accounting Option for Common Improvements to Real Estate
Author: Jim Balthaser.; Thomas J. Callahan.
Source: Volume 40, Number 03, Spring 2023 , pp.29-31(3)
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Abstract:
The economic performance requirement, under Section 461, that real estate developers wait until all economic performance test elements have been met before adding the cost of common improvements to the basis of benefitted units at best meant delays before deductions could be taken, and at worst meant such costs were never recovered. Now, new Revenue Procedure 2023-9 provides developers a safe harbor.Keywords: IRS Sec. 461, Rev. Proc. 2023-9, Rev. Proc. 92-29, real estate developers, common improvements, alternative cost accounting method
Affiliations:
1: Thompson Hine LLP; 2: Thompson Hine LLP.