IRS Practice Unit: Section 263A Costs for Self-Constructed Assets Guidance Updated (IRC §263A)

Taxpayers are required to capitalize certain costs incurred in producing self-constructed assets — assets they produce and use, and don’t sell in the regular course of business (for example, a facility) — as the IRS Large Business and International Concept Unit outlined in a practice unit released September 16, discussing such costs and allocation methods pursuant to the final Treasury Regulations under tax code Section 263A, effective for tax years beginning on or after November 20, 2018. Material costs, labor costs and other incidental costs are among those that must be capitalized — not deducted currently but recovered ...