Revenue Procedure 2017-30

Summary of changes from prior guidance

Section 6.10 Partial dispositions of tangible depreciable assets to which the IRS's adjustment pertains

Changes section number to 6.10 from 6.12.

Section no longer applies to partial disposition elections specified in Reg. Section 1.168(i)-8(d)(2)(i) that are not made under Reg. Section 1.168(i)-8(d)(2)(iii).

Section 6.13 Disposition of a building or structural component

Changes section number to 6.13 from 6.15.

Removes previous Section 6.15(10)(c), as this former provision related to prior Section 6.11, which has been removed.

Modifies previous Section 6.15(1)(b)(iv) so that new section also does not apply to any disposition of a portion of an asset in a transaction described in the last sentence in Reg. Section 1.168(i)-8(d)(1) for which the taxpayer did not make a partial disposition election in accordance with Reg. Section 1.168(i)-2(d)(iv).

Section 6.14 Dispositions of tangible depreciable assets (other than a building or its structural components)

Changes section number to 6.14 from 6.16.

Removes previous Section 6.16(9)(c), as this former provision related to prior Section 6.11, which has been removed.

Modifies previous Section 6.16(1)(b)(iv) so that new section also does not apply to any disposition of a portion of an asset in a transaction described in the last sentence in Reg. Section 1.168(i)-8(d)(1) for which the taxpayer did not make a partial disposition election in accordance with Reg. Section 1.168(i)-2(d)(iv).

Section 6.17 Depreciation of fiber optic transfer node and fiber optic cable used by a cable system operator

Changes section number to 6.17 from 6.19.

Removes previous Section 6.19(2)(a) relating to the temporary waiver of the eligibility rule in Section 5.01(1)(f) of Revenue Procedure 2015-13, because it is obsolete.

Note the waiver of the eligibility rule in Section 5.01(1)(d) of Revenue Procedure 2015-13 continues to apply to this change.

Section 10.01 Start-up expenditures

The amortization period of start-up expenditures is now 180 months.

Section 11.08 Tangible property

Provides that the section does not apply to amounts paid or incurred for repair and maintenance costs that the taxpayer is changing from capitalizing to deducting and for which the taxpayer has received a payment for specified energy property in lieu of tax credits under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009.

Section 12.09 Real property acquired through foreclosure

Section 12.10 Sales-based royalties

Section 12.11 Treatment of sales-based vendor chargebacks under a simplified method

Removes Paragraph (3) of these sections, certain eligibility rules temporarily inapplicable, because it is obsolete.

Section 12.14 Interest capitalization

Includes changes from an improper method of capitalizing interest under Section 1.263A-8 through 14 to capitalizing interest in accordance with Section 1.263A-8 through 14.

Also requires the statement attached to the Form 3115 to include details regarding the taxpayer's sub-methods of accounting for determining capitalizable interest in accordance with Reg. Section 1.263A-8 through 14.

Section 20.01 Change from an improper method of inclusion of rental income or expense to inclusion in accordance with the rent allocation

Clarifies that this section does not apply to rental agreements that provide a specific allocation of fixed rent as described in Reg. Section 1.467-1(c)(2)(ii)(A)(2) that allocate rent to periods other than when those rents are payable.

Section 21.05 Impermissible methods of identification and valuation of inventories

Clarifies that:

(a) Taxpayers can make a change under this section if they are changing from an impermissible method of identifying or valuing inventories under Section 471, and/or an impermissible method described in Section 1.471-2(f)(1) through (5).

(b) Taxpayers cannot make a change under this section to allocate costs to inventory under Section 471 or Section 263A.

(c) Taxpayers cannot make a change under this section if they are currently deducting inventories.

Section 21.11 Permissible methods of identification and valuation of inventories

Clarifies that taxpayers cannot make a change under this section to allocate costs to inventory under Section 471 or Section 263A.

Section 23.01 Commodities dealers, securities traders and commodities traders electing to use the mark-to-market method of accounting under Section 475(e) or (f)

Provides that the eligibility rule in Section 5.01(1)(d) of Revenue Procedure 2015-13 does not apply to this change.

Note the waiver of the eligibility rule in Section 5.01(1)(f) of Revenue Procedure 2015-13 continues to apply to this change.

Section 23.02 Taxpayers requesting to change their method of accounting from the mark-to-market method of accounting described in Section 475 to a realization method

Clarifies that a change under Section 23.02 is not limited to a change required by Section 475.

Section 25.03 Change in qualification as life/nonlife insurance company under Section 816

Clarifies that this change applies to an insurance company that changes from being treated as a life insurance company under part I of subchapter L to being treated as a non-life insurance company under part II of subchapter L, or vice versa.

Section 30.01 revocation of Section 1278(b) election

Treats taxpayers as having made a deemed Section 1278(b) election for a tax year for purposes of Section 30.01 if, for one or more market discount bonds that were acquired by the taxpayer during that tax year, the taxpayer includes in gross income on the tax return for that tax year, and on the tax return for the following tax year, the market discount attributable to each tax year, other than as a result of a disposition of the bond or a partial principal payment on the bond.