Construction period interest and taxes: the code section 266 alternative
- Gulf Energy and Development Corp., San Antonio, TX
The reliability of capitalizing construction period interest and taxes under Internal Revenue Service (IRS) Code Section 266 rather than under Code Section 189 is analyzed. An election under Code Section 266 may result in significant tax savings when the nonresidential real property constitutes both Code Section 38 property and either five-year or 10-year real property. Since many assets found in refining, gas processing, and pipeline activities fit this description, Code Section 266 election is of particular significance to corporations in the oil and gas industry. There is some uncertainty over an IRS interpretation that only the current year deduction is subject to the 266 election. 47 references. 2 tables.
- OSTI ID:
- 5290065
- Journal Information:
- Oil Gas Tax Q.; (United States), Vol. 32:1
- Country of Publication:
- United States
- Language:
- English
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