Effective Jan. 1, 2016, a taxpayer that does not have an Applicable Financial Statement (“AFS”) can deduct the cost to acquire or produce a unit of property, up to $2,500 per invoice (or per item as substantiated by the invoice), rather than capitalizing the cost. The previous deduction limit was $500 per item. The IRS increased the limit due to general sentiment that the $500 threshold was too low, as many commonly expensed items like tablets and smart phones often exceed $500. For taxpayers that have an AFS, the De minimis threshold remains $5,000 per invoice or per item. (An AFS is generally a certified audited financial statement.)

This alert includes:
The background on Tangible Property Regulations (“TPRs”) and De Minimis Safe Harber (“DMSH”)
The increase in the DMSH amount
If you could qualify and when