Скачать или смотреть Capitalizing versus Expensing | Tax Course | EA Course | CPA Exam

In this session, we cover capitalizing versus expensing as covered in a tax course and CPA exam.

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0:00 introduction
Capitalizing vs. Expensing (0:13-0:42): Capitalizing means treating a cost as an asset on the balance sheet, while expensing means taking an immediate deduction on your taxable income.
General Rule for Tangible/Intangible Assets (2:17-2:47): If you buy an asset with a useful life of more than a year, you generally need to capitalize it.
Repairs & Maintenance vs. Improvements (2:52-5:08): Repair and maintenance costs are expensed because they keep the asset in working condition. Improvements that better the asset, extend its life, or change its purpose are capitalized.
Material and Supplies (5:19-5:37): Anything less than $200 and lasting less than a year can be expensed.
De Minimis Safe Harbor Rule (5:38-7:37): This IRS rule allows businesses to expense low-cost items immediately, with limits of $5,000 per item if the business has audited financial statements (AFS) or $2,500 if they don't. This encourages investment in business property and provides an immediate deduction.

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