Payments by a cash basis taxpayer of capital expenditures:
A) Must be expensed at the time of payment.
B) Must be expensed by the end of the first year after the asset is acquired.
C) Must be deducted over the actual or statutory life of the asset.
D) Can be deducted in the year the taxpayer chooses.
E) None of the above.

Question

Quizplus · Accepted Answer

Capital expenditures must be capitalized and then depreciated or amortized over the useful life of the asset, rather than being expensed immediately.

Payments by a Cash Basis Taxpayer of Capital Expenditures