IRS Issues Final Rules on Interest Requirements for Property (1)

The IRS and Treasury Department on Wednesday issued final regulations detailing requirements for the interest capitalization of designated property.

The final regulations (RIN 1545-BN93, TD 10034) removed the associated property and similar rules from the existing regulation under Section 263 that provide interest capitalization requirements for improvements to certain property.

That section of the revenue code deals with how taxpayers treat interest expense capitalization when improving real properties. Associated properties are units that aren’t placed in service or are temporarily withdrawn from service to complete the improvement.

• The final regulations also clarify the applicability of properties ...