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Fiscal Cliff Deal Affects Fixed Asset Management

On January 1, 2013, final passage of the “fiscal cliff bill,” otherwise known as the American Taxpayer Relief Act of 2012, averted scheduled income tax increases and spending reduction requirements, much to the relief of many. However, this new Act also retroactively reinstates for 2012 many fixed asset management tax provisions that expired at the end of 2011. Included below is an excerpt from Title III in the Act.

Business Tax Extenders - Extends through 2013 expiring tax provisions relating to business taxpayers, including:

  •     the special depreciation allowance (bonus depreciation) for certain business and investment property;
  •     increased expensing allowances for depreciable business property;
  •     the reduction of the recognition period for the built-in gains of S corporations;
  •     accelerated depreciation for qualified leasehold, restaurant, and retail improvements, for
        motorsports entertainment complexes, and for business property on Indian reservations; and
  •     the election to expense advanced mine safety equipment and expensing of film and television
        production expenses.

Integrating an automated fixed asset management system is a best practice for not only ensuring regulatory compliance, but also allowing organizations to reduce potential costs by taking advantage of tax laws. For a better understanding on what the fiscal cliff bill and its provisions mean for your organization, see The American Taxpayer Relief Act of 2012: A closer look at the fixed asset provisions.

For more on fixed asset management, see Mary Driscoll’s presentation Take a Smart Approach to Fixed Asset Management. As well, check out APQC’s most recent research Take Fixed Asset Management Automation a Step Further.