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:
“Of what significance the light of day, if it is not the reflection of an inward dawn?—to what purpose is the veil of night withdrawn, if the morning reveals nothing to the soul? It is merely garish and glaring.”
—Henry David Thoreau (1817–1862)
“For a parent, it’s hard to recognize the significance of your work when you’re immersed in the mundane details. Few of us, as we run the bath water or spread the peanut butter on the bread, proclaim proudly, “I’m making my contribution to the future of the planet.” But with the exception of global hunger, few jobs in the world of paychecks and promotions compare in significance to the job of parent.”
—Joyce Maynard (20th century)
“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)