SECTION 4. SUMMARY OF — Internal Revenue Bulletin 2014-41

CHANGES IN METHODS OF ACCOUNTING RELATED TO DISPOSITIONS OF MACRS PROPERTY

.01 Final regulations . The following chart summarizes the changes in methods of accounting under § 1.167(a)–4, § 1.168(i)–1, § 1.168(i)–7, and § 1.168(i)–8 that a taxpayer may make under Rev. Proc. 2011–14.

October 6, 2014 696 Bulletin No. 2014–41

DESIGNATED

CHANGE NUMBER

FOR MORE INFORMATION

FINAL REGULATION

SECTION # in

APPENDIX in

REV. PROC.

SECTION 2011–14 (DCN) SEE

§ 1.167(a)–4, Depreciation of 6.36 199 Section leasehold improvements Rev. Proc.

SECTION

2011–14

(DCN)

§ 1.167(a)–4, Depreciation of 6.36 199 Section 3.03(4) of leasehold improvements Rev. Proc. 2014–17

General Asset Accounts:

a. § 1.168(i)–1(c), Change in 6.37 200 Section 3.02(7) of grouping assets Rev. Proc. 2014–54

b. § 1.168(i)–1(e)(2)(viii), 6.40 207 Section 3.03(3) of Change in determining asset Rev. Proc. 2014–54 disposed of

6.40 207 Section 3.03(3) of Rev. Proc. 2014–54

c. § 1.168(i)–1(j)(2), Change in method of identifying which assets or portions of assets have been disposed of from one method to another method specified in § 1.168(i)–1(j)(2)

d. § 1.168(i)–1(j)(2), Change in method of identifying which assets or portions of assets have been disposed of from a method not specified in § 1.168(i)– 1(j)(2) to a method specified in § 1.168(i)–1(j)(2)

e. § 1.168(i)–1(j)(3), Change in determining unadjusted depreciable basis of disposed asset or disposed portion of an asset from one reasonable method to another reasonable method when it is impracticable from the taxpayer’s records to determine the unadjusted depreciable basis of disposed asset or disposed portion of asset

f. § 1.168(i)–1(j)(3), Change in determining unadjusted depreciable basis of disposed asset or disposed portion of an asset from not using to using the taxpayer’s records when it is practicable from the taxpayer’s records to determine the unadjusted depreciable basis of disposed asset or disposed portion of asset

g. § 1.168(i)–1(j)(3), Change in determining unadjusted depreciable basis of disposed asset or disposed portion of an asset from an unreasonable method to a reasonable method when it is impracticable from the taxpayer’s records to determine the unadjusted depreciable basis of disposed asset or disposed portion of asset

6.37 200 Section 3.02(7) of Rev. Proc. 2014–54

6.40 207 Section 3.03(3) of Rev. Proc. 2014–54

6.37 200 Section 3.02(7) of Rev. Proc. 2014–54

6.40 207 Section 3.03(3) of Rev. Proc. 2014–54

Bulletin No. 2014–41 697 October 6, 2014

DESIGNATED

CHANGE NUMBER

FOR MORE INFORMATION

FINAL REGULATION

SECTION # in

APPENDIX in

REV. PROC.

SECTION 2011–14 (DCN) SEE

Single Asset Accounts or Multiple Asset Accounts for MACRS Property:

a. § 1.168(i)–7, Change from 6.37 200 Section single asset accounts to multiple Rev. Proc. asset accounts, or vice versa as modified

SECTION

2011–14

(DCN)

a. § 1.168(i)–7, Change from 6.37 200 Section 3.03(5) of single asset accounts to multiple Rev. Proc. 2014–17, asset accounts, or vice versa as modified by

section 3.02(7) of Rev. Proc. 2014–54

b. § 1.168(i)–7(c), Change in 6.37 200 Section 3.03(5) of grouping assets in multiple asset Rev. Proc. 2014–17, accounts as modified by

section 3.02(7) of Rev. Proc. 2014–54

Dispositions of MACRS Property (not in a general asset account):

205 Section 3.03(1) of Rev. Proc. 2014–54

206 Section 3.03(2) of Rev. Proc. 2014–54

a. § 1.168(i)–8(c)(4), Change in determining asset disposed of

b. § 1.168(i)–8(f)(2) or (3), Change in determining unadjusted depreciable basis of disposed asset in a multiple asset account or disposed portion of an asset from one reasonable method to another reasonable method when it is impracticable from the taxpayer’s records to determine the unadjusted depreciable basis of disposed asset or disposed portion of asset

c. § 1.168(i)–8(f)(2) or (3), Change in determining unadjusted depreciable basis of disposed asset in a multiple asset account or disposed portion of an asset from not using to using the taxpayer’s records when it is practicable from the taxpayer’s records to determine the unadjusted depreciable basis of disposed asset or disposed portion of asset

6.38 (Building or structural

component)

6.39 (Property other than a

building or structural com ponent)

6.37 200 Section 3.02(7) of Rev. Proc. 2014–54

6.38 (Building or structural

component)

6.39 (Property other than a

building or structural com ponent)

205 Section 3.03(1) of Rev. Proc. 2014–54

206 Section 3.03(2) of Rev. Proc. 2014–54

October 6, 2014 698 Bulletin No. 2014–41

DESIGNATED

CHANGE NUMBER

FOR MORE INFORMATION

FINAL REGULATION

SECTION # in

APPENDIX in

REV. PROC.

SECTION 2011–14 (DCN) SEE

d. § 1.168(i)–8(f)(2) or (3), 6.38 (Building 205 Section Change in determining unad- or structural Rev. Proc. justed depreciable basis of dis- component) posed asset in a multiple asset 6.39 (Property 206 Section account or disposed portion of other than a Rev. Proc. an asset from an unreasonable building or method to a reasonable method structural comwhen it is impracticable from ponent) the taxpayer’s records to determine the unadjusted depreciable basis of disposed asset or disposed portion of asset

SECTION

2011–14

(DCN)

6.38 (Building or structural

205 Section 3.03(1) of Rev. Proc. 2014–54

component)

6.39 (Property other than a

building or structural com

206 Section 3.03(2) of Rev. Proc. 2014–54

ponent)

e. § 1.168(i)–8(g), Change in method of identifying which assets in a multiple asset account or portions of assets have been disposed of from one method to another method specified in § 1.168(i)–8(g)(1) or (2)

f. § 1.168(i)–8(g), Change in method of identifying which assets in a multiple asset account or portions of assets have been disposed of from a method not specified in § 1.168(i)– 8(g)(1) or (2) to a method specified in § 1.168(i)–8(g)(1) or (2)

g. § 1.168(i)–8(h)(1), Change from depreciating a disposed asset or disposed portion of an asset to recognizing gain or loss upon disposition when a taxpayer continues to depreciate the asset or portion that the taxpayer disposed of prior to the year of change

h. § 1.168(i)–8(d)(2)(iii), Partial disposition election for the disposition of a portion of an asset to which the IRS’s adjustment pertains

.02 Late elections or revocation of a general asset account election . The following chart summarizes the late elections under § 1.168(i)–1, § 1.168(i)–8,

Prop. Reg. § 1.168(i)–1, Prop. Reg. § 1.168(i)–8, or § 1.168(1)–1T that are treated as a change in method of accounting for a limited period of time.

6.37 200 Section 3.02(7) of Rev. Proc. 2014–54

6.38 (Building or structural

component)

6.39 (Property other than a

building or structural com ponent)

6.38 (Building or structural

component)

6.39 (Property other than a

building or structural com ponent)

205 Section 3.03(1) of Rev. Proc. 2014–54

206 Section 3.03(2) of Rev. Proc. 2014–54

205 Section 3.03(1) of Rev. Proc. 2014–54

206 Section 3.03(2) of Rev. Proc. 2014–54

6.35 198 Section 3.02(6) of Rev. Proc. 2014–54

The chart includes the revocation of a general asset account election that also is treated as a change in method of accounting for a limited period of time.

Bulletin No. 2014–41 699 October 6, 2014

IN APPENDIX IN REV. PROC. 2011– 14, AND DCN

SECTION #

ELECTION OR

REVOCATION

TIME PERIOD FOR

TREATING ELECTION OR REVOCATION AS A

METHOD CHANGE

FOR MORE INFORMATION

REVOCATION METHOD CHANGE 14, AND DCN SEE

General Asset Accounts:

a. Late general asset account Taxable year beginning on or 6.32 DCN 180 Section election under § 1.168(i)–1, after 1/1/2012 and beginning Rev. Proc. Prop. Reg. § 1.168(i)–1, or before 1/1/2014 as modified § 1.168(1)–1T section

a. Late general asset account Taxable year beginning on or 6.32 DCN 180 Section 3.02(9) of election under § 1.168(i)–1, after 1/1/2012 and beginning Rev. Proc. 2014–17, Prop. Reg. § 1.168(i)–1, or before 1/1/2014 as modified by § 1.168(1)–1T section 3.02(3) of

Rev. Proc. 2014–54

b. Late election to recognize Taxable year beginning on or 6.32 DCN 180 Section 3.02(9) of gain or loss upon disposition after 1/1/2012 and beginning Rev. Proc. 2014–17, of all assets, the last asset, or before 1/1/2014 as modified by the remaining portion of the section 3.02(3) of last asset under § 1.168(i)– Rev. Proc. 2014–54 1(e)(3)(ii) or Prop. Reg. § 1.168(i)–1(e)(3)(ii)

Taxable year beginning on or after 1/1/2012 and beginning before 1/1/2014

6.32 DCN 180 Section 3.02(9) of Rev. Proc. 2014–17, as modified by section 3.02(3) of Rev. Proc. 2014–54

c. Late election to recognize gain or loss upon disposition of all assets or the last asset under § 1.168(1)–1T(e)(3)(ii)

c. Late election to recognize Taxable year beginning on or 6.32 DCN 180 Section 3.02(9) of gain or loss upon disposition after 1/1/2012 and beginning Rev. Proc. 2014–17, of all assets or the last asset before 1/1/2014 as modified by under § 1.168(1)–1T(e)(3)(ii) section 3.02(3) of

Rev. Proc. 2014–54

d. Late election to recognize Taxable year beginning on or 6.32 DCN 180 Section 3.02(9) of gain or loss upon disposition after 1/1/2012 and beginning Rev. Proc. 2014–17, of an asset in a qualifying dis- before 1/1/2014 as modified by position under § 1.168(i)– section 3.02(3) of 1(e)(3)(iii), Prop. Reg. Rev. Proc. 2014–54 § 1.168(i)–1(e)(3)(iii), or § 1.168(1)–1T(e)(3)(iii)

Taxable year beginning on or after 1/1/2012 and beginning before 1/1/2014

6.32 DCN 180 Section 3.02(9) of Rev. Proc. 2014–17, as modified by section 3.02(3) of Rev. Proc. 2014–54

e. Revocation of a general asset account election made under § 1.168(i)–1, Prop. Reg. § 1.168(i)–1, or § 1.168(1)–1T, or made under section 6.32 in Appendix in Rev. Proc. 2011–14

Taxable year beginning on or after 1/1/2012 and beginning before 1/1/2015

6.34 DCN 197 Section 3.03(2) of Rev. Proc. 2014–17, as modified by section 3.02(5) of Rev. Proc. 2014–54

Late Partial Disposition Election for MACRS Property (not in a general asset account):

a. Late partial disposition elec- First or second taxable succeed- 6.33 DCN tion made under § 1.168(i)– ing the applicable taxable year 8(d)(2)(iv)(B) as defined in § 1.168(i)–

First or second taxable succeeding the applicable taxable year as defined in § 1.168(i)– 8(d)(2)(iv)

6.33 DCN 196 Section 3.02(4) of Rev. Proc. 2014–54

b. Other late partial disposition elections made under § 1.168(i)–8(d)(2)(i)

c. Late partial disposition election made under Prop. Reg. § 1.168(i)–8(d)(2)(iv)(B)

Taxable year beginning on or after 1/1/2012 and beginning before 1/1/2015

First or second taxable succeeding the applicable taxable year as defined in Prop. Reg. § 1.168(i)–8(d)(2)(iv)

6.33 DCN 196 Section 3.02(4) of Rev. Proc. 2014–54

c. Late partial disposition elec- First or second taxable succeed- 6.33 DCN 196 Section 3.03(1) of tion made under Prop. Reg. ing the applicable taxable year Rev. Proc. 2014–17, § 1.168(i)–8(d)(2)(iv)(B) as defined in Prop. Reg. as modified by

§ 1.168(i)–8(d)(2)(iv) section 3.02(4) of

Rev. Proc. 2014–54

d. Other late partial disposition Taxable year beginning on or 6.33 DCN 196 Section 3.03(1) of elections made under Prop. after 1/1/2012 and beginning Rev. Proc. 2014–17, Reg. § 1.168(i)–8(d)(2)(i) before 1/1/2014 as modified by

Taxable year beginning on or after 1/1/2012 and beginning before 1/1/2014

6.33 DCN 196 Section 3.03(1) of Rev. Proc. 2014–17, as modified by section 3.02(4) of Rev. Proc. 2014–54

October 6, 2014 700 Bulletin No. 2014–41

.03 Temporary and proposed regula- tions . If a taxpayer applies § 1.167(a)–4T, § 1.168(i)–1T, § 1.168(i)–7T, § 1.168(i)– 8T, Prop. Reg. § 1.168(i)–1, Prop. Reg.

§ 1.168(i)–7, or Prop. Reg. § 1.168(i)–8 for a taxable year beginning on or after January 1, 2012, and beginning before January 1, 2014, the following chart sum

marizes the changes in methods of accounting under those regulation sections that the taxpayer may make under Rev. Proc. 2011–14.

TEMPORARY OR PROPOSED APPENDIX in REV. FOR MORE

REGULATION SECTION PROC. 2011–14 DCN INFORMATION SEE

§ 1.167(a)–4T, Depreciation of leasehold 6.27 175 Section 3.02(4) of improvements Rev. Proc. 2014–17

TEMPORARY OR PROPOSED

SECTION # in APPENDIX in REV.

REGULATION SECTION

PROC. 2011–14 DCN

§ 1.167(a)–4T, Depreciation of leasehold 6.27 175 Section 3.02(4) of improvements Rev. Proc. 2014–17

General Asset Accounts:

a. § 1.168(i)–1T(c) or Prop. Reg. 6.28 176 Section 3.02(5) of § 1.168(i)–1(c), Change in grouping assets Rev. Proc. 2014–17

b. § 1.168(i)–1T(e)(2)(viii) or Prop. Reg. 6.31 179 Section 3.02(8) of § 1.168(i)–1(e)(2)(viii), Change in deter- Rev. Proc. 2014–17 mining asset disposed of

6.31 179 Section 3.02(8) of Rev. Proc. 2014–17

c. § 1.168(i)–1T(j)(2) or Prop. Reg. § 1.168(i)–1(j)(2), Change in method of identifying which assets have been disposed of from one method to another method specified in § 1.168(i)–1T(j)(2), or from one method to another method specified in Prop. Reg. § 1.168(i)–1(j)(2)

d. § 1.168(i)–1T(j)(2) or Prop. Reg. § 1.168(i)–1(j)(2), Change in method of identifying which assets have been disposed of from a method not specified in § 1.168(i)–1T(j)(2) to a method specified in § 1.168(i)–1T(j)(2), or from a method not specified in Prop. Reg. § 1.168(i)– 1(j)(2) to a method specified in Prop. Reg. § 1.168(i)–1(j)(2)

e. § 1.168(i)–1T(j)(3), Change in determining unadjusted depreciable basis of disposed asset from one reasonable method to another reasonable method

f. Prop. Reg. § 1.168(i)–1(j)(3), Change in determining unadjusted depreciable basis of disposed asset or disposed portion of an asset from one reasonable method to another reasonable method

6.28 176 Section 3.02(5) of Rev. Proc. 2014–17

6.31 179 Section 3.02(8) of Rev. Proc. 2014–17

6.28 176 Section 3.02(5) of Rev. Proc. 2014–17

Single Asset Accounts or Multiple Asset Accounts for MACRS Property:

a. § 1.168(i)–7T or Prop. Reg. 6.28 176 Section 3.02(5) of § 1.168(i)–7, Change from single asset Rev. Proc. 2014–17 accounts to multiple asset accounts, or vice versa

b. § 1.168(i)–7T(c), Change in grouping 6.28 176 Section 3.02(5) of assets in multiple asset accounts Rev. Proc. 2014–17

Dispositions of MACRS Property (not in a general asset account):

a. § 1.168(i)–8T(c)(4) or Prop. Reg. § 1.168(i)–8(c)(4), Change in determining asset disposed of

6.29 (Building or structural component)

6.29 (Building or 177 Section 3.02(6) of Rev. structural Proc. 2014–17, as modicomponent) fied by section 3.02(2)

of Rev. Proc. 2014–54

6.30 (Property 178 Section 3.02(7) of other than a build- Rev. Proc. 2014–17 ing or structural component)

178 Section 3.02(7) of Rev. Proc. 2014–17

Bulletin No. 2014–41 701 October 6, 2014

TEMPORARY OR PROPOSED APPENDIX in REV. FOR MORE b. § 1.168(i)–8T(e)(2) or Prop. Reg. 6.28 176 Section 3.02(5) of § 1.168(i)–8(f)(2), Change in determining Rev. Proc. 2014–17 unadjusted depreciable basis of disposed asset in a multiple asset account from one reasonable method to another reasonable method when it is impracticable from the taxpayer’s records to determine the unadjusted depreciable basis of disposed asset

TEMPORARY OR PROPOSED

SECTION # in APPENDIX in REV.

REGULATION SECTION

PROC. 2011–14 DCN

6.28 176 Section 3.02(5) of Rev. Proc. 2014–17

c. Prop. Reg. § 1.168(i)–8(f)(3), Change in determining unadjusted depreciable basis of disposed portion of an asset from one reasonable method to another reasonable method

d. § 1.168(i)–8T(f) or Prop. Reg. § 1.168(i)–8(g), Change in method of identifying which assets in a multiple asset account have been disposed of from one method to another method specified in § 1.168(i)–8T(f)(1) or (2), or from one method to another method specified in Prop. Reg. § 1.168(i)–8(g)(1) or (2)

e. § 1.168(i)–8T(f) or Prop. Reg. § 1.168(i)–8(g), Change in method of identifying which assets in a multiple asset account have been disposed of from a method not specified in § 1.168(i)–8T(f)(1) or (2) to a method specified in § 1.168(i)– 8T(f)(1) or (2), or from a method not specified in Prop. Reg. § 1.168(i)–8(g)(1) or (2) to a method specified in Prop. Reg. § 1.168(i)–8(g)(1) or (2)

f. § 1.168(i)–8T(g)(1) or Prop. Reg. § 1.168(i)–8(h)(1), Change from depreciating a disposed asset or disposed portion of an asset to recognizing gain or loss upon disposition when a taxpayer continues to depreciate the asset or portion that the taxpayer disposed of prior to the year of change

g. Prop. Reg. § 1.168(i)–8(d)(2)(iii), Partial disposition election for the disposition of a portion of an asset to which the IRS’s adjustment pertains

6.28 176 Section 3.02(5) of Rev. Proc. 2014–17

6.29 (Building or 177 Section 3.02(6) of structural compo- Rev. Proc. 2014–17, as nent) modified by section

3.02(2) of Rev. Proc. 2014-54

6.30 (Property 178 Section 3.02(7) of Rev. other than a build- Proc. 2014–17 ing or structural component)

6.35 198 Section 3.03(3) of Rev. Proc. 2014–17, as modified by section 3.02(6) of Rev. Proc. 2014-54

6.29 (Building or structural component)

6.29 (Building or 177 Section 3.02(6) of structural compo- Rev. Proc. 2014–17, as nent) modified by section

3.02(2) of Rev. Proc. 2014–54

6.30 (Property 178 Section 3.02(7) of other than a build- Rev. Proc. 2014–17 ing or structural component)

178 Section 3.02(7) of Rev. Proc. 2014–17

6.29 (Building or structural component)

178 Section 3.02(7) of Rev. Proc. 2014–17