Considering the entity s accomplishment in preparing several detailed project reports already, the capital expenditure
during this fiscal (FY2013-14) is likely to make a new record, surpassing the latest one.
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.
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.
509, 519-20 (1955) (taxpayer could allocate legal fees between business expenses and capital expenditures
in suit for both an accounting of profit and clear and free title to oil properties), aff'd, 238 F.
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
An additional requirement for deductibility is that the costs not be in the nature of a capital expenditure
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.