Tag: Section 263(a)
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Capitalization of Overhead in Construction – Section 263(a)
There are two exceptions allowed for small business residential contractors to escape the requirements of Section 263(a) – Capitalization of Overhead. The first is the $50,000,000 in sales per year threshold.
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Capital Expenditures – IRS Definition
The Internal Revenue Service uses a complex definition to identify capital expenditures (assets). A capital expenditure is not deductible as an expense in the tax year purchased; the taxpayer or entity must use depreciation, amortization or depletion to obtain deductible value on the entity’s return.