New IRS regulations on capitalization and repairs versus improvements were supposed to take effect on January 1, 2012. However, on November 20, 2012, the IRS announced that the effective date for the new regulations would be delayed until January 1, 2014. In addition, the IRS stated that it intends to make changes to the regulations before their new 2014 effective date.
For the 2012 and 2013 tax years, taxpayers have the option of applying the new temporary regulations. However, this is not required so taxpayers can continue to follow the old repair versus capitalization rules for 2012 and 2013.