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To regard the cost of an improvement or other purchase as a capital asset for purposes of determining Income Tax liability. To calculate the net worth upon which an investment is based. To issue company stocks or bonds to finance an investment.

The owner of a business may capitalize the expense of renovating a factory to maximize his or her after-tax profits, since such expenses may be used to decrease the pretax profits, thereby reducing the amount of profits subject to taxation.

An individual may compute the net worth of shares of stock, in order to treat them as capital assets for income tax purposes. Such treatment often results in more favorable rates of taxation on the profits made when assets are sold because they are considered capital gains.


(Provide capital), verb advance, afford aid, afford support, aid, aid with a subsidy, back, back up, bring aid, contribute, extend credit, favor, finance, fund, furnish aid, furnish foundations, furnish support, give aid, give support, help, invest, lend, lend one's aid, lend support, loan, pecuniam mutuam dare, pension, promote, provide capital for, provide for, provide funds for, provide money for, set up, set up in business, sponsor, subsidize, supply aid, supply support, supply with a subsidy, support, venture capital
Associated concepts: capitalization of income, capitalization of net income, capitalization of stabalized income, capitallze earning


(Seize the chance), verb avail oneself of, benefit, convert to use, create an opening, employ, exploit, find one's advantage in, make an opening, make the most of, make use of, manipulate, profit, put in operation, put to advantage, put to service, reap the benefit of, render useeul, take advantage of, take the opportunity, turn to good account, turn to one's advantage, utilize, utilize for profit
See also: finance
References in periodicals archive ?
An expenditure is a capitalizable improvement if it is a betterment, restoration, or adaptation (collectively, the "improvement standards"), each of which is briefly discussed below.
current income (except to the extent of contingent payments) and a deductible or capitalizable expenditure.
A capitalizable improvement to property is also now more precisely defined, mainly as expenditures that result in a betterment, adapt the property to a new or different use, or restore it to working order or like-new condition after the end of its depreciation class life (the BAR tests).
64) The proposed regulations reflect this exclusion (65) and, in an effort to address the complexity of determining the appreciation in value of land sold as part of a construction project, the proposed regulations introduce a land safe harbor whereby DPGR is reduced by land costs (including costs capitalizable to the land) plus a certain percentage.
Identify contracts that contain capitalizable assets
One of the most influential cases in the area of distinguishing deductible tests from capitalizable expenditures is Plainfield-Union Water Code.
Specific interest payments are matched with specific construction expenditures, and detailed information about the underlying debt contracts is necessary to calculate the capitalizable interest.
Under that test, a taxpayer was considered to be engaging in predecisional investigatory activities giving rise to deductible costs, rather than facilitative activities resulting in capitalizable costs, if the activities were performed before the taxpayer that incurred the costs (acquirer or target) decided whether to engage in a transaction and in which specific transaction to engage.
In determining whether a cost was a capitalizable improvement, the 2006 proposed regulations began with an initial unit of property determination of all components that are functionally interdependent to define the largest unit of property as a starting point for the analysis.
The IRS National Office took the position that INDOPCO did nothing more than clarify what had been the applicable law all along and that a cost that was not capitalizable before INDOPCO was not capitalizable solely by reason ofINDOPCO.
The note concerning fixed assets dealt with capitalizable costs and the depreciation of enterprise fund fixed assets, and it presented fixed assets by asset class.
263A calculations to determine whether they are correctly applying the on-site sales definition in determining capitalizable storage and handling costs.