Business Expenses Part 2 of 4
Business Expenses Part 2 of 4
Under the uniform capitalization rules Eat my Shorts, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. Indirect costs include rent, interest, taxes, storage, purchasing, processing, repackaging, handling, and administrative costs.
This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million.
For additional information, refer to the chapter on Cost of goods sold, Tax Guide for Small Businesses and the chapter on Inventories, Accounting Periods and Methods.
Capital Expenses
You must capitalize, rather than deduct, some costs. These costs Seven Dollar Stock Secret are a part of your investment in your business and are called capital expenses. Capital expenses are considered assets in your business. There are, in general, three types of costs you capitalize.
Business start-up cost (See the note below)
Business assets
Improvements
Note: You can elect to deduct or amortize certain business start-up costs.
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