Navigating the Topsy Turvy World of Uniform Capitalization Rules for Manufacturers

Navigating the Topsy Turvy World of Uniform Capitalization Rules for Manufacturers2018-11-12T15:38:44+00:00

IRS Code and section numbers don’t sound like recreational reading for manufacturing industry professionals. Luckily, we’ve created a guide to explain why uniform capitalization rules (UNICAP) are  important and how they impact your business. The details include:

  • deductions for direct, indirect, and mixed service costs (and when they should be capitalized),
  • how some manufacturing companies must observe UNICAP rules, while other companies are excluded from them,
  • how to achieve full depreciation deductions for certain tangible personal property,
  • which costs are normally deductible–but do not obtain deductibility through UNICAP, and
  • methods to allocate direct and indirect costs (and the formula for percentage of costs for mixed service activities to allocate to UNICAP).

UNICAP is a significant IRS audit area, so download this CRInsight to help you navigate uniform capitalization rules, their exclusions, and ways you can allocate your costs.