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The Repair Allowance Method, also known as the Repair Allowance Safe Harbor, is a proposed regulation to the Internal Revenue Service administrative regulations. This optional method of calculating deductions affects individuals and corporate taxpayers who own property subject to MACRS and repair or improve property used in a trade or business.〔 Prop. Reg. §. 1.263(a)-3(g) 〕〔http://ria.thomson.com/Journals/jretart.pdf〕 This method permits taxpayers to treat both material and labor cost used to repair or improve property as a trade or business expense.〔 Samuel A. Donaldson, Federal Income Taxation of Individuals 190-191 (2005)〕 Therefore, taxpayers who elect this method may deduct this cost as an above the line deduction under 26 CFR §. 162.〔(US CODE: Title 26,162. Trade or business expenses )〕 This method is a proposed simplification, when compared to other deduction methods, because it does not distinguish between repair and improvement of property.〔Id.〕 Without the proposed regulation, improvements to property must be capitalized and not expensed because improvements are considered a capital expenditure.〔See IRC §§. 162 and 212〕 Arguably, this proposed regulation would not be used by a taxpayer who has a clearly defined business expense otherwise deductible under IRC §. 162. And even California adopts the PRA ==Calculation of Repair Allowance Deduction== The Repair Allowance Method deduction is dependent on four factors: a) class life of property (defined in Revenue Ruling 87-56),〔187-2 C.B. 674〕 b) “average unadjusted basis of property”, c) taxpayer’s cost to repair or improve property, and d) the “repair allowance amount” established by the proposed regulation for the class life of an asset.〔See supra note 4〕 The “average unadjusted basis” of the property is calculated by averaging the original cost of all property with the same class life at the beginning at the year and the end of the year that is either repaired or improved within the recovery period.〔 The formula for Repair Allowance Amount is defined as follows: Repair Allowance Amount〔 equals: Average Unadjusted Basis of asset(s) within the same class x Statutory Repair Allowance Percentage for class life of the asset(s) The taxpayer’s maximum deductible amount is defined as follows: Deduction equals the lesser of: 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「Repair Allowance Method」の詳細全文を読む スポンサード リンク
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