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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 ?
Atkinson, "A Bright Line Rule Dims: Manufacturers Must Capitalize Environmental Cleanup Costs," 45 TAX MGMT.
The simple answer is because there is no earthly reason to capitalize any of these words.
This has become is a must for us, so that come game time our offensive personnel will recognize and capitalize on anything the defense gives us.
A direct reading of the opinion leads to the simple conclusion that companies must capitalize liabilities assumed in asset acquisitions.
263(a)-4(c) requires taxpayers to capitalize costs incurred in connection with the acquisition of a laundry list of intangibles, including, for example, an ownership interest in a corporation, partnership, or LLC; a variety of financial interests and products; insurance and annuity contracts; leases; patents and copyrights; as well as both "customer-based" and "supplier-based" intangibles.
If this happens taxpayers either should negotiate a reimbursement from the seller or be prepared to capitalize the expenditure.
In Russia, Eastern Europe and many nations where economic evolution is dramatic and difficult today, people make a leap of faith in the global market's capacity to create opportunity and their ability to capitalize on it.
But in another case where the death occurred before the acquisition, the buyer had to capitalize rather than deduct the payments (David R.
96-62,(4) and revenue agents have not interpreted the advertising ruling as giving them a green light to capitalize advertising expenditures.
Developers might no real not realize that, under these proposed rules, they could be required to capitalize land very early in the development process.
The IRS normally takes the position that businesses must capitalize the cost of enterprise-resource-planning software (ERP) and amortize it over 36 months.