Which of the following statements about the uniform capitalization (unicap) rules is false?
A) The unicap rules determine the annual costs that firms must capitalize to inventory for tax purposes.
B) The unicap rules may require capitalization of more indirect costs to inventory for tax purposes than for book purposes.
C) The unicap rules may result in a book/tax difference for cost of goods sold.
D) The unicap rules apply to all taxpayers with inventory, regardless of size.

Question

Quizplus · Accepted Answer

The unicap rules do not apply to all taxpayers with inventory. Taxpayers with average annual gross receipts of $26 million or less for the three preceding tax years are exempt from the unicap rules unless they produce real or personal property for use in their trade or business, as specified in Internal Revenue Service (IRS) regulations.

Which of the Following Statements About the Uniform Capitalization (Unicap)