Franchising Today - Fall 2016 - 24

Column by Leah Bendig and Maggie Wise

Remodeling costs can add up quickly,
and it is challenging to maintain detailed
records breaking down every component.

COSTS AND ASSETS
recent irs rules have simplified determining how to
account for new remodeling costs and assets replaced.

REMODELING
Remodeling in the retailIN
and THE
both theRETAIL
new remodeling costs and
restaurant industry is essential in order to keep your business up-to-date
and remain competitive. However,
remodeling costs can add up quickly,
and it can be challenging to maintain
detailed records breaking down every
component of the remodeling project. Therefore, restaurateurs and retailers should be aware of recent IRS
rules that have simplified this process
when determining how to account for
24

franchising-today.com

FALL 2016

the assets that have been replaced.
Because of the frequency with
which retailers and restaurants incur
remodeling or refreshing costs, in
late 2015 the IRS issued Revenue Procedure 2015-56. In conjunction with
the tangible property regulations,
this guidance implements a safe harbor method of accounting that allows
certain retailers and restaurants to
currently deduct 75 percent of their

qualifying remodeling costs and capitalize and depreciate the remaining 25
percent for income tax purposes. Furthermore, these rules can be applied
retroactively for taxable years beginning on or after Jan. 1, 2014.
Determining whether an expenditure is a deductible expense rather
than a capital improvement has generated considerable debate between
the IRS and taxpayers for many years,
so this ruling is expected to provide a
better framework for taxpayers in the
retail and restaurant industry, while
minimizing the need for such businesses to perform a complicated analysis to determine whether a remodeling cost is a betterment, an adaptation
or a repair.
In addition to these simplified


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Table of Contents for the Digital Edition of Franchising Today - Fall 2016

Contents
Franchising Today - Fall 2016 - Cover1
Franchising Today - Fall 2016 - Cover2
Franchising Today - Fall 2016 - 1
Franchising Today - Fall 2016 - Contents
Franchising Today - Fall 2016 - 3
Franchising Today - Fall 2016 - 4
Franchising Today - Fall 2016 - 5
Franchising Today - Fall 2016 - 6
Franchising Today - Fall 2016 - 7
Franchising Today - Fall 2016 - 8
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Franchising Today - Fall 2016 - 10
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Franchising Today - Fall 2016 - 12
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Franchising Today - Fall 2016 - 14
Franchising Today - Fall 2016 - 15
Franchising Today - Fall 2016 - 16
Franchising Today - Fall 2016 - 17
Franchising Today - Fall 2016 - 18
Franchising Today - Fall 2016 - 19
Franchising Today - Fall 2016 - 20
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Franchising Today - Fall 2016 - 24
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Franchising Today - Fall 2016 - 27
Franchising Today - Fall 2016 - 28
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Franchising Today - Fall 2016 - 30
Franchising Today - Fall 2016 - 31
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Franchising Today - Fall 2016 - 33
Franchising Today - Fall 2016 - 34
Franchising Today - Fall 2016 - 35
Franchising Today - Fall 2016 - 36
Franchising Today - Fall 2016 - 37
Franchising Today - Fall 2016 - 38
Franchising Today - Fall 2016 - 39
Franchising Today - Fall 2016 - 40
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Franchising Today - Fall 2016 - 42
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Franchising Today - Fall 2016 - 47
Franchising Today - Fall 2016 - 48
Franchising Today - Fall 2016 - 49
Franchising Today - Fall 2016 - 50
Franchising Today - Fall 2016 - 51
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Franchising Today - Fall 2016 - 53
Franchising Today - Fall 2016 - 54
Franchising Today - Fall 2016 - 55
Franchising Today - Fall 2016 - 56
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Franchising Today - Fall 2016 - 58
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Franchising Today - Fall 2016 - Cover3
Franchising Today - Fall 2016 - Cover4
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2020_vol5issue1a
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2019_vol4issue4
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2019_vol4issue4b
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2019_vol4issue4a
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2019_vol4issue3
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2019_vol4issue3b
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2019_vol4issue3a
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2019_vol4issue2
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2019_vol4issue2b
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2019_vol4issue2a
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2019_vol4issue1
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2019_vol4issue1a
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2018_vol3issue4
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2018_vol3issue3
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2018_vol3issue2
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2018_vol3issue1
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2017winter
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2017fall
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2017summer
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2017spring
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2016winter
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2016fall
http://www.nxtbook.com/nxtbooks/knighthouse/ft_2016summer
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