What are Tangible Property Regulations(TPR)?
Tangible Property Regulations (TPR) are IRS rules that decide if costs spent on a building after it’s already in use should be capitalized (added to the property’s value and depreciated over time) or deducted immediately as a current expense.
These rules are taxpayer-friendly, offering opportunities for immediate tax deductions and allowing adjustments to be made for past years.
Why it Matters?
If proper depreciation isn't followed, the IRS can disallow all deductions, resulting in hefty tax penalties. However, by ensuring compliance, you can take advantage of substantial tax savings. Properly managing your property’s depreciation is essential to maximize your financial benefits and minimize risk. (For free evaluation to make sure you are in compliance, scan the QR code below.)
Example of TPR in Action
A landlord owns a 20-year-old commercial building with 10 tenant spaces. Over the years, they capitalized expenses for:
- Leasehold improvements (renovating tenant spaces).
- HVAC units (heating and cooling systems).
- A new roof (installed 15 years after purchase).
- ADA compliance upgrades (making the building accessible).
Why Choose TPTM?
TPR Focus
TPTM is the only firm dedicated to tangible property regulation compliance across the U.S.
Expert Tax Review
All projects are reviewed for tax accuracy by Eric P. Wallace, top CPA in construction and real estate.
CPA Guidance
Our CPAs guide you on reporting and recording cost segregation or TPR results.
IRS Forms Signed
Our staff CPA signs all IRS 3115 forms for compliance and accuracy.
Fast & Efficient
Projects are completed quickly with regular updates throughout the process.
Tax Court Defense
We defend our work all the way to the U.S. Tax Court for full assurance.
“Beginning on January 1, 2014, ALL taxpayers are required to comply with the final regulations and are expected to change their accounting methods to implement the final regulations”.
– IRS.gov
Cost Segregation Studies vs TPR Studies
Cost Segregation is optional and can be performed at any time, at the time a building is purchased or constructed, or years afterwards. The TPRs, however, are mandatory. Taxpayers must “scrub” their depreciation schedules and remove any work efforts that should not have been capitalized. TPTM does this work while other cost segregation providers do not know how.
TPR Process
Tax Depreciation Schedule
Provide TPTM with your federal tax depreciation schedule and property addresses.
Analysis
TPTM will provide a comprehensive analysis to determine if a TPR Study is needed and provide expected tax deductions.
Engage
TPTM will provide an engagement letter and requires a 50% retainer to move forward.
Data Collection
TPTM needed documentation includes appraisals, blueprints, closing documents, etc.
Site Survey
A site visit will be scheduled, where the property will be photographed and surveyed.
Final Study
Your final study will be completed within a few weeks of data gathering. The IRS 3115 form will be signed upon request.
Note: We are not an accounting firm, nor we are an annual tax filing firm.
We specialize in TPTM and willing to work with your current CPA firm.
What is Cost Segregation?(optional)
Cost Segregation is an application by which commercial property owners accelerate depreciation and reduce the amount of taxes owed. This savings generates substantial cash flow that owners often use to reinvest in their business, purchase additional property, or apply to their principal payment.
How does Cost Segregation Work?
A Cost Segregation Study accelerates the depreciation of a building or renovation components into shorter depreciation categories. Decorative items such as carpet, molding, and interior windows can be moved from 39 or 27.5-year depreciation to a 5 or 7-year category. The 15-year category would include landscaping, hardscaping, site utilities, and paving also known as land improvements.
Taxpayer Savings via TPR Studies
- Large office building owner in California: $3,281,111
- Commercial building owner (7 properties): $4,401,473
- Large Mall in Eastern US: $4,045,129
- Strip Mall owner with properties in NY and NJ: $10,675,853
- Commercial buildings in Boston: $4,046,046
- Office building in MD: $806,117
- Multi-office building owner in California: $3,439,205
- Office building owner with buildings in Ohio: $2,045,728
Our Expert
Eric P. Wallace, CPA
Eric P. Wallace, CPA, is a nationally recognized expert in tax, accounting, auditing, and consulting for the construction, real estate, and homebuilding industries. His work specifically focuses on tax method changes that provide significant tax deductions for the real estate and construction industry and their related owners. He has filed thousands of proved method changes that have resulted in over $300,000,000 million in tax deductions.
Books by Eric P. Wallace
Handle tax, accounting and auditing issues for all types of construction-based firms and projects with this specially priced combo that includes both Construction Guide: Accounting and Knowledge-Based Audits and Construction Guide: Tax and Advisory Services. This specially priced duo provides the guidance you need to advise clients on how to maximize their bottom lines and minimize risk. Each title includes: Construction industry basics to help you get up to speed quickly Advanced topics to keep specialists current in this complex practice area Free companion CD with checklists, questionnaires, workpapers and reports for each book