Capitalization vs. Expense.
Rentals R Us incurs the following expenditures on an apartment building it owns:
Replace the roof $25,000
Repaint the exterior 7,000
Install new locks 1,500
Replace broken windows 1,200
Replace crumbling sidewalks and stairs 7,000
Discuss the proper tax treatment for these expenditures.© BrainMass Inc. brainmass.com June 4, 2020, 1:03 am ad1c9bdddf
First, the general rule with respect to capitalization of items: if the expenditure extends the life or increases the value of the property, then it is a capital expense.
Replace the roof is a capital expenditure because it extends the ...
The 164 word solution provides a sentence of explanation for eachof the items for an apartment building.