Rule
Construction-related expense items, such as tools, materials, and wages to construction workers are treated as part of the cost of acquisition of a capital asset. Reasonable wages paid in carrying on of a trade or business qualify as a deduction from gross income, but when wages are paid in connection with construction or acquisition of a capital asset they must be capitalized and are then entitled to be amortized over the life of the capital asset so acquired.
§263(a)(1) of the Internal Revenue Code denies a deduction for any amount paid out for construction or permanent improvement of facilities. This extends to the cost of acquisition, construction, or erection of buildings. Treas. Reg. §1.263(a)-2(a).
Read more about this topic: Commissioner V. Idaho Power Co.
Famous quotes containing the word rule:
“Charity is a cop-out so traditionally female in its apparent self-effacement that there seems resonant comfort in it. We’re no longer supposed to serve the imaginations of men who have dominated us. We are to give up ourselves instead to those whose suffering is greater than our own. Looking down is just as distorting as looking up and as dangerous in perpetuating hierarchies.”
—Jane Rule (b. 1931)
“He who allows me to rule is in fact my master.”
—Pierre Corneille (1606–1684)
“All you people don’t know about lost causes. Mr. Paine does. He said once they were the only causes worth fighting for, and he fought for them once, for the only reason that any man ever fights for them. Because of just one plain, simple rule—Love Thy Neighbor. And in this world today, full of hatred, a man who knows that one rule has a great trust.”
—Sidney Buchman (1902–1975)