Section  263A  Cost  Capitalization  for  Automobile  Dealers

by the Rev. Proc. 2010-44 Safe Harbor Elections

Date:  July 22, 2011 …   1 p.m. Eastern; 12 p.m. Central; 11 a.m. Mountain; 10 a.m. Pacific. 

        This seminar discussed in detail the underlying problems and issues in applying the cost capitalization rules to dealerships whose activities and operations fall beyond the scope of the Rev. Proc. 2010-44 safe harbor elections. 

Topics include …

        ·    Step-by-Step through the process of filing Form 3115 for dealerships to make the Sec. 263A safe harbor elections, including practical suggestions

        ·    The Simplified Resale Method … What is required, what is not, and why it is likely that most dealerships currently are not properly meeting the requirements of the Regulations

        ·    IRS TAM 200736026 … “The document of doom.”  What if a portion of the dealership’s activities are NOT “covered by the TAM?”  What does that mean? … What the TAM says and doesn’t say.  If positions are taken that are different from the IRS conclusions the TAM, what might be the consequences?

        ·    How does the use of LIFO to value inventories affect the computation of the Sec. 481(a) adjustment?  Various alternatives

        ·    Removing labor costs and capitalized gross profit on parts with respect to the “reseller with production activities” safe harbor election … Pros and cons … Is it practical to complicate the Section 481(a) adjustment over this?

        ·    What should you expect if the IRS audits your Section 263A calculations?