Search Help


Enter one of more keywords to search. Use quotes for “exact phrase.” Note that '*' and '?' wildcards are supported.

When your search results appear, you can refine your search further: Sort for only results in which all search terms appear AND/OR sort by chronological order.

Article Date:
July 2006


Word Count:
1121

 

 

Making Mold Removal a Repair and Not a Capital Expenditure


Tax law grants an immediate deduction for repairs, but requires that you capitalize and depreciate improvements and betterments.

 

For tax purposes, the financial difference between a repair and a capital expenditure is huge. You deduct the repair immediately, which puts tax money in your pocket immediately.

 

Unlike the immediate repair deduction, the capital expenditure on a business building does damage to your cash in two ways:

 

1.

You get your write-offs on a straight-line basis over 39 years (think time value of money here).

2.

To the extent of gain on sale, you pay a depreciation recapture tax of up to 25% on the depreciation deductions you claimed (here, think in terms of a loan that ... Log in to view full article.

Log in to view full article
Already a subscriber?
 
Email Address

 
Password

Log In

You'll be able to read the full article and get instant access to the last few issues of the Tax Reduction Letter

Not yet a subscriber?
 
with a money-back guarantee



 

SS