This is the second WNTS Insight in a three-part series that discusses in depth the recently issued temporary and proposed regulations regarding the deduction and capitalization of expenditures related to tangible property (the temporary regulations or repair regulations). The first Insight discussed rules related to effective dates, units of property, and dispositions. (See WNTS Insight, "The tangible property repair regulations: effective dates, units of property, and dispositions," January 4, 2012.) This Insight discusses rules related to the acquisition or improvement of property. The third will include a discussion of rotable spare parts, environmental remediation, general asset accounts, the recovery of capital improvements subject to lease, and removal costs.