Many business leaders assume incentives and related savings are primarily directed at large, "blockbuster" capital expenditure
projects, especially in the U.
Worse, further scrutiny of the SIE data reveals that small firms would be unable to expand capital expenditure
even if they wanted to.
Wal-Mart's 2004 capital expenditures
were estimated at roughly $9 billion, which it hopes to grow to $14 billion this year, Jay Fitzsimmons, the retailer's treasurer and senior vice president of finance, said late last month at the Merrill Lynch Retailing Leaders and Household Products & Cosmetics Conference.
The Service argued that the repairs were capital expenditures
, as they were performed to comply with the building code and would increase the property's value.
The IRS disallowed the deduction claiming it represented a capital expenditure
263(a)(l)-(b) explains that the cost of capital expenditures
are added to the basis of the underlying property and "recovered through depreciation, amortization, cost of goods sold, or adjustments to basis.
After the IRS determined deficiencies for 1988-1992, FPL argued that it was entitled to a greater deduction for repair expenses, some of which it had improperly characterized as capital expenditures
If the expenditure enables property to be put to a new, different use, the cost is a capital expenditure
Second, where a lump-sum expenditure is connected with both business expenses and capital expenditures
, courts have allowed allocation of the expenditure between section 162 and section 263.
Moreover, the courts have specifically recognized that the one-year rule is a useful guidepost for distinguishing between capital expenditures
and deductible expenses; see Jack's Cookie Company, 597 F2d 395 (4th Cir.
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