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    Is expense related to Ad Valorem Tax Appeal a capital cost?

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    I was wondering if an expense related to 2009 Ad Valorem Tax Appeal would be included in a capitalized cost of a construction asset?

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    Solution Preview

    I would say that the answer depends on the circumstances. Following are examples with reasoning for the response.

    Example 1:

    A self constructed asset was completed and put in service in 2009, and subsequently assessed for county or city tax purposes. The value was disputed because there were no closing documents to define the price and the county or city used an inappropriate measure to determine the tax basis. There was a significant ...

    Solution Summary

    This 301 word solution provides three examples that explain whether to capitalize or expense the cost of a tax appeal.