In response to recently released IRS Tangible Property Regulations, the Unit of Property (UoP) Report can serve as a valuable reference document to enable property owners and tax professionals make informed decisions as to whether to expense or capitalize future improvements made to a building. The UoP data is broken down into several categories of building components plus any assets with different MACRS lives. The importance of “benchmarking” UoPs can be critical as the Tangible Property Regulations permit taxpayers to expense certain incoming assets if a.) they are not “Betterments” (i.e. increased performance or quality) and b.) the incoming asset does not exceed a Materiality Threshold of approximately 30%.
UoP Reports are particularly valuable for properties that have been either fully depreciated or have been in service for many years where traditionally cost segregation studies have not been performed.
