Message Font: Serif | Sans-Serif
No. of Recommendations: 0
"That is referring to the Uniform Capitalization Rules mentioned in the paragraph above the statement you quoted."

I guess I'm having a bit of trouble with this distinction. When it says:

"Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities."

I took that to mean that instead of directly expensing a cost that you must add it to COGS. So then when it said:

"This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million."

I thought that might mean that you don't have to bother with COGS.


No, it means you don't have to follow UNICAP (Code Section 263A) and use one of several acceptable methods for allocating part of cost of goods manufactured AND indirect costs and "mixed service costs" to ending inventory.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.