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Content about Generally Accepted Accounting Principles

April 30, 2012
Changes in Repair or Replace Tax Rules (Part 2 of 2)

ARDMORE, Pa. — Are certain expenditures currently deductible or must they be capitalized

ARDMORE, Pa. — In an effort to resolve the controversy over whether certain expenditures made by a drycleaning business are currently deductible as repair expenses, or whether they must be capitalized and deducted over the life of the underlying business asset, the Internal Revenue Service has finally released new regulations.

The IRS’s long-awaited expanded regulations for determining whether an expense must be capitalized because it betters or improves tangible business property or equipment, restores it, or adapts it to a new and different use, will have a significant impact on every drycleaning business that acquires, produces, or improves its tangible property. 

In addition to clarifying and expanding the current rules, the new regulations create “bright-line” tests for applying the repair-or-capitalize standards, provides guidance for accounting for—and disposing of—repaired property, as well as clarifying other aspects of the repair/capitalize dilemma.

April 26, 2012
Changes in Repair or Replace Tax Rules (Part 1 of 2)

ARDMORE, Pa. — Are certain expenditures currently deductible or must they be capitalized

ARDMORE, Pa. — In an effort to resolve the controversy over whether certain expenditures made by a drycleaning business are currently deductible as repair expenses, or whether they must be capitalized and deducted over the life of the underlying business asset, the Internal Revenue Service has finally released new regulations.

The IRS’s long-awaited expanded regulations for determining whether an expense must be capitalized because it betters or improves tangible business property or equipment, restores it, or adapts it to a new and different use, will have a significant impact on every drycleaning business that acquires, produces, or improves its tangible property. 

In addition to clarifying and expanding the current rules, the new regulations create “bright-line” tests for applying the repair-or-capitalize standards, provides guidance for accounting for—and disposing of—repaired property, as well as clarifying other aspects of the repair/capitalize dilemma.

October 20, 2011
An SUV in Every Parking Lot

WASHINGTON — In the past, generous tax breaks for gas-consuming heavy SUVs often raised the ire of Congress. However, last December’s Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 actually made tax breaks for these assets even more generous. Although probably unintended, the limited-time 100% “bonus” depreciation allowance includes a new, heavy SUV purchased and used for business.

That’s right, the entire purchase price can be written off in the placed-in-service year. A dry cleaning business that buys and places in service a new heavy SUV—those built on a truck chassis and rated at more than 6,000 pounds gross (loaded) vehicle weight—after Sept. 8, 2010, and before Jan. 1, 2012, and uses it 100% for business, may write off its entire cost in the placed-in-service year. There is no specific rule barring this result.

October 18, 2011
Deductions: Get ‘Em While You Can (Part 1 of 2)

ARDMORE, Pa. — Thanks to the 100% “bonus” depreciation write-offs created by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, many dry cleaning businesses are discovering that capital investments in equipment, machinery and other business assets are more affordable today than ever before. Remember, however, the 100% bonus depreciation write-off is available only for qualifying purchases made by dry cleaning plants and businesses in 2011.

Those dry cleaners that have hesitated or postponed making capital investments because of the recent economic downturn might now want to consider how the combined use of incentives and the 100% bonus depreciation can substantially reduce the cost of capital investments. Even funding those new-equipment purchases is easier—at least for a while.

November 19, 2008
Prepare for Tax Time Early

Most drycleaners take their paperwork to their accountant just before the April 15th deadline and hope for the best. But by being proactive, you can fine-tune the outcome, anticipate cashflow needs, reduce the chance of penalties and lower accountant fees.

November 10, 2008
Selling a Store? Conditions Are Good, Report Suggests

SAN FRANCISCO — It’s a seller’s market for drycleaning stores, although there are indications of trouble on the horizon, according to BizBuySell, an online business-for-sale marketplace.

BizBuySell recently completed its Insight Report, an economic indicator that tracks the health of the U.S. small-business economy, for the third quarter. Each quarter, the company analyzes the sales and listing prices of small businesses across the United States based on more than 50,000 businesses for sale and those recently sold.

April 21, 2008
Stimulus Package Extends to Small Businesses

WASHINGTON, D.C. — The economic stimulus package that will soon issue more than 130 million consumers tax rebates of $600 to $1,200 will also offer small businesses incentives to buy new equipment.

The government’s approved package includes two provisions aimed at helping small businesses increase capital spending: a huge increase in the Section 179 tax deduction and a bonus depreciation allowance.