IRS practice unit: Interest capitalization for self-constructed assets

Interest capitalization for self-constructed assets

The IRS Large Business and International (LB&I) division publicly released a “practice unit”—part of a series of IRS examiner “job aides” and training materials intended to describe for IRS agents leading practices about tax concepts in general and specific types of transactions.


The title of this “process unit” (as referred to by the IRS) is: Interest capitalization for self-constructed assets

This process unit has been updated to reflect changes made by the 2017 tax law (Pub. L. No. 115-97 that is often referred to as the “Tax Cuts and Jobs Act”) and the measure providing that a small business taxpayer is not required to capitalize costs under section 263A. This process unit is further updated to reflect a change to the ending production period of the aging process of beer, wine, and distilled spirits in section 263A(f)(4)(B) pursuant to a provision of the Consolidated Appropriations Act, 2021 (Pub. L. No. 116-260).

Read the process unit on the IRS practice unit webpage (posting date of February 12, 2021).

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