Significance
This case deals with the costs and tax consequences related to producing real and tangible personal property, when a taxpayer constructs property instead of purchasing it. This result was codified in §263A of the Internal Revenue Code (known as the uniform capitalization rules or the Unicap rules). This requires the capitalization of all direct and indirect costs allocable to the construction or production of real property or tangible personal property. It also applies to the acquisition of inventory materials and wages paid to builders or other production workers.
Direct costs include raw materials and wages paid to builders or other production workers. Treas. Reg. §1.263A-1(e)(2).
Indirect costs include repairs, depreciation, utilities, rent, sales tax, property tax, insurance, storage, and packaging. Treas. Reg. §1.263A-1(e)(3).
Read more about this topic: Commissioner V. Idaho Power Co.
Famous quotes containing the word significance:
“I am not afraid that I shall exaggerate the value and significance of life, but that I shall not be up to the occasion which it is.”
—Henry David Thoreau (1817–1862)
“History is the interpretation of the significance that the past has for us.”
—Johan Huizinga (1872–1945)
“Politics is not an end, but a means. It is not a product, but a process. It is the art of government. Like other values it has its counterfeits. So much emphasis has been placed upon the false that the significance of the true has been obscured and politics has come to convey the meaning of crafty and cunning selfishness, instead of candid and sincere service.”
—Calvin Coolidge (1872–1933)