The world's largest retailer's capital expenditures
for 2004 accounted for 3.
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The IRS argued that the work was a capital expenditure
to be amortized over the remaining lease term; the taxpayer contended the repair costs were deductible under Sec.
Of the five requirements set forth by the court, only one was relevant in the instant case: the costs must represent current expenses, not capital expenditures
Accordingly, global capital expenditure
is expected to witness strong growth in 2011 at 15%.
On the other hand, the Tax Court found that FPL's accounting method was to treat certain repairs as capital expenditures
on its returns in accordance with its regulatory reporting method.
If the expenditure enables property to be put to a new, different use, the cost is a capital expenditure
The one-year rule serves as a guide in distinguishing between capital expenditures
and deductible expenses, regardless of which accounting method a taxpayer uses.
In Tellier, the Supreme Court said the principal function of "ordinary" in section 162 is to distinguish between currently deductible expenses and nondeductible capital expenditures
by the FRS companies for refining and marketing increased 49% from their 2004 level to $21 billion in 2005, mostly as the result of mergers and acquisitions.
263(a)-2 provides examples of capital expenditures
and includes, among others, the cost of acquiring property with a useful life beyond the tax year.
The resulting capital expenditures
will increase production costs-which cannot be fully passed on to customers and will lead to a decline in future earnings.