Mastering the UNICAP Rules of IRC 263A: Allocating Direct and Indirect Costs for Producers of Tangible Property

An Advanced Case Study With Calculations and Schedules

Recording of a 110-minute CPE webinar with Q&A


Conducted on Wednesday, December 16, 2015

Recorded event now available

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Program Materials

This webinar will provide tax professionals and advisers with an in-depth analysis of the uniform capitalization (UNICAP) rules of IRC Sect. 263A by detailing activities subject to UNICAP rules, exploring frequently faced cost-capitalization decisions through practical examples, and offering concrete steps to calculating the UNICAP allocation.

Description

The UNICAP rules of IRC 263A require taxpayers to capitalize all direct costs, and certain indirect costs, properly allocable to real property and the production of tangible personal property produced by the taxpayer. Section 263A considers the term “produce” to apply to the construction, building, installation, manufacturing, development, improvement, raising or growing of property. This definition applies to self-constructed assets, as well as property built pursuant to a contract.

Determining which costs are “properly allocable” to the production of covered property can create significant challenges for tax professionals and advisers. The rules governing capitalization of interest as an allocable cost are particularly complex, and can have a measurable impact on the amount of interest costs that can be currently deducted versus those interest costs that must be capitalized. Capitalization rules also play a significant role in calculating ending inventory and cost of goods sold.

Listen as our panel of seasoned federal tax specialists provides a comprehensive guide to the Section 263A UNICAP rules, including practical examples, an illustration of UNICAP computations, and best practices for planning and compliance with Sect. 263A regulations.

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Outline

  1. UNICAP Rules under IRC 263A
  2. Determining what “production costs” must be capitalized
  3. Inventory capitalization
  4. Case study

Benefits

The panel will discuss these and other critical issues:

  • How to determine what component of inventory costs requires capitalization
  • Special treatment of tax depreciation in excess of financial statement depreciation
  • Assigning costs to production activities
  • Illustration of cost computations

Faculty

Jolaine L. Hill, CPA
Jolaine L. Hill, CPA

Director
Katz Sapper & Miller

Ms. Hill is primarily responsible for tax compliance issues that include the technical review of tax returns. She...  |  Read More

Ross Margelefsky
Ross Margelefsky
Director
PricewaterhouseCoopers

Mr. Margelefsky is attached to the firm's Washington National Tax Services Group, specializing in accounting...  |  Read More

Kari Peterson
Kari Peterson
Senior Manager
RSM US

Ms. Peterson focuses on UNICAP, and specializes in the areas of tax, Schedule C, small businesses, and business...  |  Read More

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