Title: 26 CFR § 1.263 (a)-3 - Amounts paid to improve tangible property. | CFR | US Law | LII / Legal Information Institute
Headings: 26 CFR § 1.263 (a)-3 - Amounts paid to improve tangible property.
26 CFR § 1.263 (a)-3 - Amounts paid to improve tangible property.
Example. Railroad rolling stock
Example 1. Building systems
Example 2. Building systems
Example 3. Building structure and systems; condominium
Example 4. Building structure and systems; property other than buildings
Example 5. Plant property; discrete and major function
Example 6. Plant property; discrete and major function
Example 7. Plant property; industrial process
Example 8. Personal property
Example 9. Personal property
Example 10. Building structure and systems; leased building
Example 11. Production of real property related to leased property
Example 12. Leasehold improvements; construction allowance used for lessor-owned improvements
Example 13. Buildings and structural components; leased office space
Example 14. Leased property; personal property
Example 15. Improvement property
Example 16. Additional rules; year placed in service
Example 17. Additional rules; change in subsequent year
Example 18. Additional rules; change in subsequent year
Example 19. Additional rules; change in subsequent year
(f) Improvements to leased property -
(2) Lessee improvements -
(3) Lessor improvements -
Example 1. Lessee improvements; additions to building
Example 2. Lessee improvements; additions to certain structural components of buildings
Example 3. Lessor Improvements; additions to building
Example 4. Lessee property; personal property added to leased building
Example 5. Lessor property; buildings on leased property
Example 6. Lessee contribution to construction costs
Example 1. Component removed during improvement; no disposition
Example 2. Component removed during improvement; disposition
Example 3. Component removed during repair or maintenance; no disposition
Example 4. Component removed with disposition and restoration
(5) Unadjusted basis -
Example 1. Safe harbor for small taxpayers applicable
Example 2. Safe harbor for small taxpayers inapplicable
Example 3. Safe harbor applied building-by-building
Example 4. Safe harbor applied to leased building property
Example 1. Routine maintenance on component
Example 2. Routine maintenance after class life
Example 3. Routine maintenance on rotable spare parts
Example 4. Routine maintenance resulting from prior owner's use
Example 5. Routine maintenance resulting from new owner's use
Example 6. Routine maintenance; replacement of substantial structural part; coordination with section 263A
Example 7. Routine maintenance once during class life
Example 8. Routine maintenance; reasonable expectation
Example 9. Routine maintenance on non-rotable part
Example 10. Routine maintenance with related betterments
Example 11. Routine maintenance with unrelated improvements
Example 12. Exceptions to routine maintenance
Example 13. Routine maintenance on a building; escalator system
Example 14. Not routine maintenance; escalator system
Example 15. Routine maintenance on building; reasonable expectation
Example 1. Amelioration of pre-existing material condition or defect
Example 2. Not amelioration of pre-existing condition or defect
Example 3. Not amelioration of pre-existing material condition or defect
Example 4. Not amelioration of pre-existing material condition or defect
Example 5. Amelioration of material condition or defect
Example 6. Not a betterment; building refresh
Example 7. Building refresh; limited improvement
Example 8. Betterment; building remodel
Example 9. Not betterment; relocation and reinstallation of personal property
Example 10. Betterment; relocation and reinstallation of equipment
Example 11. Betterment; regulatory requirement
Example 12. Not a betterment; regulatory requirement
Example 13. Not a betterment; new roof membrane
Example 14. Material increase in capacity; building
Example 15. Material increase in capacity; channel
Example 16. Not a material increase in capacity; channel
Example 17. Material increase in capacity; channel
Example 18. Not a material increase in capacity; building
Example 19. Material increase in capacity; building
Example 20. Not material increase in efficiency; HVAC system
Example 21. Material increase in efficiency; building
Example 22. Material addition; building
Example 23. Costs incurred during betterment
Example 1. Replacement of loss component
Example 2. Replacement of sold component
Example 3. Restoration after casualty loss
Example 4. Restoration after casualty event
Example 5. Restoration after casualty loss; limitation
Example 6. Restoration of property in a state of disrepair
Example 7. Rebuild of property to like-new condition before end of class life
Example 8. Rebuild of property to like-new condition after end of class life
Example 9. Not a rebuild to a like-new condition
Example 10. Replacement of major component or substantial structural part; personal property
Example 11. Repair performed during restoration
Example 12. Related amounts to replace major component or substantial structural part; personal property
Example 13. Not replacement of major component; incidental
Example 14. Replacement of major component or substantial structural part; roof
Example 15. Not replacement of major component or substantial structural part; roof membrane
Example 16. Not a replacement of major component or substantial structural part; HVAC system
Example 17. Replacement of major component or substantial structural part; HVAC system
Example 18. Not replacement of major component or substantial structural part; HVAC system
Example 19. Replacement of major component or substantial structural part; fire protection system
Example 20. Replacement of major component or substantial structural part; electrical system
Example 21. Not a replacement of major component or substantial structural part; electrical system
Example 22. Replacement of major component or substantial structural part; plumbing system
Example 23. Not replacement of major component or substantial structural part; plumbing system
Example 24. Replacement of major component or substantial structural part; plumbing system
Example 25. Not replacement of major component or substantial structural part; windows
Example 26. Replacement of major component; windows
Example 27. Replacement of substantial structural part; windows
Example 28. Not replacement of major component or substantial structural part; floors
Example 29. Replacement of major component or substantial structural part; floors
Example 30. Replacement with no disposition
Example 31. Replacement with disposition
(l) Capitalization of amounts to adapt property to a new or different use -
Example 1. New or different use; change in building use
Example 2. Not a new or different use; leased building
Example 3. Not a new or different use; preparing building for sale
Example 4. New or different use; land
Example 5. New or different use; part of building
Example 6. Not a new or different use; part of building
Example 7. Not a new or different use; part of building
(m) Optional regulatory accounting method -
Example 1. Taxpayer subject to regulatory accounting rules of FERC
Example 2. Taxpayer not subject to regulatory accounting rules of FERC
Example 3. Taxpayer subject to regulatory accounting rules of FCC
Example 4. Taxpayer subject to regulatory accounting rules of STB
(n) Election to capitalize repair and maintenance costs -
Example 1. Election to capitalize routine maintenance on non-rotable part
Example 2. No election to capitalize routine maintenance
Example 3. Election to capitalize replacement of building component

Content: Except as otherwise provided in paragraphs (e) (4), and (e) (5) (ii) of this section, in the case of a building (as defined in § 1.48-1 (e) (1) ), each building and its structural components (as defined in § 1.48-1 (e) (2)) is a single unit of property (“building”). Paragraph (e) (2) (iii) of this section provides the unit of property for condominiums, paragraph (e) (2) (iv) of this section provides the unit of property for cooperatives, and paragraph (e) (2) (v) of this section provides the unit of property for leased buildings. (ii) Application of improvement rules to a building. An amount is paid to improve a building under paragraph (d) of this section if the amount is paid for an improvement under paragraphs (j), (k), or paragraph (l) of this section to any of the following: (A) Building structure. A building structure consists of the building (as defined in § 1.48-1 (e) (1) ), and its structural components (as defined in § 1.48-1 (e) (2) ), other than the structural components designated as buildings systems in paragraph (e) (2) (ii) (B) of this section. (B) Building system. Each of the following structural components (as defined in § 1.48-1 (e) (2) ), including the components thereof, constitutes a building system that is separate from the building structure, and to which the improvement rules must be applied -
(1) Heating, ventilation, and air conditioning (“HVAC”) systems (including motors, compressors, boilers, furnace, chillers, pipes, ducts, radiators); (2) Plumbing systems (including pipes, drains, valves, sinks, bathtubs, toilets, water and sanitary sewer collection equipment, and site utility equipment used to distribute water and waste to and from the property line and between buildings and other permanent structures); (3) Electrical systems (including wiring, outlets, junction boxes, lighting fixtures and associated connectors, and site utility equipment used to distribute electricity from the property line to and between buildings and other permanent structures);