Late elections for depreciation of Indian reservation and biofuel property and accounting for film, TV and theater production costs
IRS guidance allowing taxpayers to make late elections under section 168 and section 181
IRS guidance allowing taxpayers to make late elections under section 168 and section 181
The IRS today released an advance version of Rev. Proc. 2022-23 [PDF 161 KB] as guidance allowing a taxpayer to make late elections:
- Under sections 168(j)(8) and 168(l)(3)(D), relating to the depreciation of qualified Indian reservation property and the special depreciation allowance for second generation biofuel plant property, respectively, for the taxpayer’s tax year ending in 2018 or in 2019, for certain property placed in service by the taxpayer after December 31, 2017
- Under section 181(a)(1) for the taxpayer’s tax year ending in 2018 or in 2019 for certain film, television, or live theatrical productions commenced by the taxpayer after December 31, 2017
Today’s revenue procedure states that the IRS has determined it appropriate to treat the making of late elections under sections 168(j)(8), 168(l)(3)(D), and 181(a)(1) as a change in method of accounting with a section 481(a) adjustment for a limited period of time. Accordingly, taxpayers may make these late elections by filing an amended return or an administrative adjustment request under section 6227, as applicable, or a Form 3115, Application for Change in Accounting Method. The revenue procedure provides procedures for making these late elections.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.