IRS Practice Unit: Interest Capitalization for Self-Constructed Assets (IRC §263A)

Interest capitalization for self-constructed assets outlined by an IRS Large Business and International Concept Unit practice unit revision released February 7. The IRS explained that businesses that construct assets for use in their operation may use borrowed funds and therefore, balance sheets may reflect loans, bonds, notes, etc. Such indebtedness may be subject to interest capitalization, the IRS stated. The update reflects a change to the ending production period of the aging process of beer, wine, and distilled spirits under the Further Consolidated Appropriations Act, 2020 (Pub. L. No. 116-94). [IRS Practice Unit INV/P/203_01_01-01 (revised Jan. 27, 2020)]

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