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Taxact login 7. Taxact login   Costs You Can Deduct or Capitalize Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Carrying Charges Research and Experimental CostsProduct. Taxact login Costs not included. Taxact login Intangible Drilling Costs Exploration CostsPartnerships and S corporations. Taxact login Development Costs Circulation Costs Business Start-Up and Organizational Costs Reforestation Costs Retired Asset Removal Costs Barrier Removal CostsOther barrier removals. Taxact login Film and Television Production Costs What's New Film and television productions costs. Taxact login  The election to expense film and television production costs does not apply to productions that begin after December 31, 2013. Taxact login See Film and Television Production Costs , later. Taxact login Introduction This chapter discusses costs you can elect to deduct or capitalize. Taxact login You generally deduct a cost as a current business expense by subtracting it from your income in either the year you incur it or the year you pay it. Taxact login If you capitalize a cost, you may be able to recover it over a period of years through periodic deductions for amortization, depletion, or depreciation. Taxact login When you capitalize a cost, you add it to the basis of property to which it relates. Taxact login A partnership, corporation, estate, or trust makes the election to deduct or capitalize the costs discussed in this chapter except for exploration costs for mineral deposits. Taxact login Each individual partner, shareholder, or beneficiary elects whether to deduct or capitalize exploration costs. Taxact login You may be subject to the alternative minimum tax (AMT) if you deduct research and experimental, intangible drilling, exploration, development, circulation, or business organizational costs. Taxact login For more information on the alternative minimum tax, see the instructions for the following forms. Taxact login Form 6251, Alternative Minimum Tax—Individuals. Taxact login Form 4626, Alternative Minimum Tax—Corporations. Taxact login Topics - This chapter discusses: Carrying charges Research and experimental costs Intangible drilling costs Exploration costs Development costs Circulation costs Qualified disaster expenses Business start-up and organizational costs Reforestation costs Retired asset removal costs Barrier removal costs Film and television production costs Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets Form (and Instructions) 3468 Investment Credit 8826 Disabled Access Credit See chapter 12 for information about getting publications and forms. Taxact login Carrying Charges Carrying charges include the taxes and interest you pay to carry or develop real property or to carry, transport, or install personal property. Taxact login Certain carrying charges must be capitalized under the uniform capitalization rules. Taxact login (For information on capitalization of interest, see chapter 4 . Taxact login ) You can elect to capitalize carrying charges not subject to the uniform capitalization rules, but only if they are otherwise deductible. Taxact login You can elect to capitalize carrying charges separately for each project you have and for each type of carrying charge. Taxact login For unimproved and unproductive real property, your election is good for only 1 year. Taxact login You must decide whether to capitalize carrying charges each year the property remains unimproved and unproductive. Taxact login For other real property, your election to capitalize carrying charges remains in effect until construction or development is completed. Taxact login For personal property, your election is effective until the date you install or first use it, whichever is later. Taxact login How to make the election. Taxact login   To make the election to capitalize a carrying charge, attach a statement to your original tax return for the year the election is to be effective indicating which charges you are electing to capitalize. Taxact login However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Taxact login Attach the statement to the amended return and write “Filed pursuant to section 301. Taxact login 9100-2” on the statement. Taxact login File the amended return at the same address you filed the original return. Taxact login Research and Experimental Costs The costs of research and experimentation are generally capital expenses. Taxact login However, you can elect to deduct these costs as a current business expense. Taxact login Your election to deduct these costs is binding for the year it is made and for all later years unless you get IRS approval to make a change. Taxact login If you meet certain requirements, you may elect to defer and amortize research and experimental costs. Taxact login For information on electing to defer and amortize these costs, see Research and Experimental Costs in chapter 8. Taxact login Research and experimental costs defined. Taxact login   Research and experimental costs are reasonable costs you incur in your trade or business for activities intended to provide information that would eliminate uncertainty about the development or improvement of a product. Taxact login Uncertainty exists if the information available to you does not establish how to develop or improve a product or the appropriate design of a product. Taxact login Whether costs qualify as research and experimental costs depends on the nature of the activity to which the costs relate rather than on the nature of the product or improvement being developed or the level of technological advancement. Taxact login      The costs of obtaining a patent, including attorneys' fees paid or incurred in making and perfecting a patent application, are research and experimental costs. Taxact login However, costs paid or incurred to obtain another's patent are not research and experimental costs. Taxact login Product. Taxact login   The term “product” includes any of the following items. Taxact login Formula. Taxact login Invention. Taxact login Patent. Taxact login Pilot model. Taxact login Process. Taxact login Technique. Taxact login Property similar to the items listed above. Taxact login It also includes products used by you in your trade or business or held for sale, lease, or license. Taxact login Costs not included. Taxact login   Research and experimental costs do not include expenses for any of the following activities. Taxact login Advertising or promotions. Taxact login Consumer surveys. Taxact login Efficiency surveys. Taxact login Management studies. Taxact login Quality control testing. Taxact login Research in connection with literary, historical, or similar projects. Taxact login The acquisition of another's patent, model, production, or process. Taxact login When and how to elect. Taxact login   You make the election to deduct research and experimental costs by deducting them on your tax return for the year in which you first pay or incur research and experimental costs. Taxact login If you do not make the election to deduct research and experimental costs in the first year in which you pay or incur the costs, you can deduct the costs in a later year only with approval from the IRS. Taxact login Deducting or Amortizing Research and Experimentation Costs IF you . Taxact login . Taxact login . Taxact login THEN . Taxact login . Taxact login . Taxact login Elect to deduct research and experimental costs as a current business expense Deduct all research and experimental costs in the first year you pay or incur the costs and all later years. Taxact login Do not deduct research and experimental costs as a current business expense If you meet the requirements, amortize them over at least 60 months, starting with the month you first receive an economic benefit from the research. Taxact login See Research and Experimental Costs in chapter 8. Taxact login Research credit. Taxact login   If you pay or incur qualified research expenses, you may be able to take the research credit. Taxact login For more information see Form 6765, Credit for Increasing Research Activities and its instructions. Taxact login Intangible Drilling Costs The costs of developing oil, gas, or geothermal wells are ordinarily capital expenditures. Taxact login You can usually recover them through depreciation or depletion. Taxact login However, you can elect to deduct intangible drilling costs (IDCs) as a current business expense. Taxact login These are certain drilling and development costs for wells in the United States in which you hold an operating or working interest. Taxact login You can deduct only costs for drilling or preparing a well for the production of oil, gas, or geothermal steam or hot water. Taxact login You can elect to deduct only the costs of items with no salvage value. Taxact login These include wages, fuel, repairs, hauling, and supplies related to drilling wells and preparing them for production. Taxact login Your cost for any drilling or development work done by contractors under any form of contract is also an IDC. Taxact login However, see Amounts paid to contractor that must be capitalized , later. Taxact login You can also elect to deduct the cost of drilling exploratory bore holes to determine the location and delineation of offshore hydrocarbon deposits if the shaft is capable of conducting hydrocarbons to the surface on completion. Taxact login It does not matter whether there is any intent to produce hydrocarbons. Taxact login If you do not elect to deduct your IDCs as a current business expense, you can elect to deduct them over the 60-month period beginning with the month they were paid or incurred. Taxact login Amounts paid to contractor that must be capitalized. Taxact login   Amounts paid to a contractor must be capitalized if they are either: Amounts properly allocable to the cost of depreciable property, or Amounts paid only out of production or proceeds from production if these amounts are depletable income to the recipient. Taxact login How to make the election. Taxact login   You elect to deduct IDCs as a current business expense by taking the deduction on your income tax return for the first tax year you have eligible costs. Taxact login No formal statement is required. Taxact login If you file Schedule C (Form 1040), enter these costs under “Other expenses. Taxact login ”   For oil and gas wells, your election is binding for the year it is made and for all later years. Taxact login For geothermal wells, your election can be revoked by the filing of an amended return on which you do not take the deduction. Taxact login You can file the amended return for the year up to the normal time of expiration for filing a claim for credit or refund, generally, within 3 years after the date you filed the original return or within 2 years after the date you paid the tax, whichever is later. Taxact login Energy credit for costs of geothermal wells. Taxact login   If you capitalize the drilling and development costs of geothermal wells that you place in service during the tax year, you may be able to claim a business energy credit. Taxact login See the Instructions for Form 3468 for more information. Taxact login Nonproductive well. Taxact login   If you capitalize your IDCs, you have another option if the well is nonproductive. Taxact login You can deduct the IDCs of the nonproductive well as an ordinary loss. Taxact login You must indicate and clearly state your election on your tax return for the year the well is completed. Taxact login Once made, the election for oil and gas wells is binding for all later years. Taxact login You can revoke your election for a geothermal well by filing an amended return that does not claim the loss. Taxact login Costs incurred outside the United States. Taxact login   You cannot deduct as a current business expense all the IDCs paid or incurred for an oil, gas, or geothermal well located outside the United States. Taxact login However, you can elect to include the costs in the adjusted basis of the well to figure depletion or depreciation. Taxact login If you do not make this election, you can deduct the costs over the 10-year period beginning with the tax year in which you paid or incurred them. Taxact login These rules do not apply to a nonproductive well. Taxact login Exploration Costs The costs of determining the existence, location, extent, or quality of any mineral deposit are ordinarily capital expenditures if the costs lead to the development of a mine. Taxact login You recover these costs through depletion as the mineral is removed from the ground. Taxact login However, you can elect to deduct domestic exploration costs paid or incurred before the beginning of the development stage of the mine (except those for oil and gas wells). Taxact login How to make the election. Taxact login   You elect to deduct exploration costs by taking the deduction on your income tax return, or on an amended income tax return, for the first tax year for which you wish to deduct the costs paid or incurred during the tax year. Taxact login Your return must adequately describe and identify each property or mine, and clearly state how much is being deducted for each one. Taxact login The election applies to the tax year you make this election and all later tax years. Taxact login Partnerships and S corporations. Taxact login   Each partner, not the partnership, elects whether to capitalize or to deduct that partner's share of exploration costs. Taxact login Each shareholder, not the S corporation, elects whether to capitalize or to deduct that shareholder's share of exploration costs. Taxact login Reduced corporate deductions for exploration costs. Taxact login   A corporation (other than an S corporation) can deduct only 70% of its domestic exploration costs. Taxact login It must capitalize the remaining 30% of costs and amortize them over the 60-month period starting with the month the exploration costs are paid or incurred. Taxact login A corporation may also elect to capitalize and amortize mining exploration costs over a 10-year period. Taxact login For more information on this method of amortization, see Internal Revenue Code section 59(e). Taxact login   The 30% the corporation capitalizes cannot be added to its basis in the property to figure cost depletion. Taxact login However, the amount amortized is treated as additional depreciation and is subject to recapture as ordinary income on a disposition of the property. Taxact login See Section 1250 Property under Depreciation Recapture in chapter 3 of Publication 544. Taxact login   These rules also apply to the deduction of development costs by corporations. Taxact login See Development Costs , later. Taxact login Recapture of exploration expenses. Taxact login   When your mine reaches the producing stage, you must recapture any exploration costs you elected to deduct. Taxact login Use either of the following methods. Taxact login Method 1—Include the deducted costs in gross income for the tax year the mine reaches the producing stage. Taxact login Your election must be clearly indicated on the return. Taxact login Increase your adjusted basis in the mine by the amount included in income. Taxact login Generally, you must elect this recapture method by the due date (including extensions) of your return. Taxact login However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Taxact login Make the election on your amended return and write “Filed pursuant to section 301. Taxact login 9100-2” on the form where you are including the income. Taxact login File the amended return at the same address you filed the original return. Taxact login Method 2—Do not claim any depletion deduction for the tax year the mine reaches the producing stage and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. Taxact login   You also must recapture deducted exploration costs if you receive a bonus or royalty from mine property before it reaches the producing stage. Taxact login Do not claim any depletion deduction for the tax year you receive the bonus or royalty and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. Taxact login   Generally, if you dispose of the mine before you have fully recaptured the exploration costs you deducted, recapture the balance by treating all or part of your gain as ordinary income. Taxact login Under these circumstances, you generally treat as ordinary income all of your gain if it is less than your adjusted exploration costs with respect to the mine. Taxact login If your gain is more than your adjusted exploration costs, treat as ordinary income only a part of your gain, up to the amount of your adjusted exploration costs. Taxact login Foreign exploration costs. Taxact login   If you pay or incur exploration costs for a mine or other natural deposit located outside the United States, you cannot deduct all the costs in the current year. Taxact login You can elect to include the costs (other than for an oil, gas, or geothermal well) in the adjusted basis of the mineral property to figure cost depletion. Taxact login (Cost depletion is discussed in chapter 9 . Taxact login ) If you do not make this election, you must deduct the costs over the 10-year period beginning with the tax year in which you pay or incur them. Taxact login These rules also apply to foreign development costs. Taxact login Development Costs You can deduct costs paid or incurred during the tax year for developing a mine or any other natural deposit (other than an oil or gas well) located in the United States. Taxact login These costs must be paid or incurred after the discovery of ores or minerals in commercially marketable quantities. Taxact login Development costs also include depreciation on improvements used in the development of ores or minerals and costs incurred for you by a contractor. Taxact login Development costs do not include the costs for the acquisition or improvement of depreciable property. Taxact login Instead of deducting development costs in the year paid or incurred, you can elect to treat the cost as deferred expenses and deduct them ratably as the units of produced ores or minerals benefited by the expenses are sold. Taxact login This election applies each tax year to expenses paid or incurred in that year. Taxact login Once made, the election is binding for the year and cannot be revoked for any reason. Taxact login How to make the election. Taxact login   The election to deduct development costs ratably as the ores or minerals are sold must be made for each mine or other natural deposit by a clear indication on your return or by a statement filed with the IRS office where you file your return. Taxact login Generally, you must make the election by the due date of the return (including extensions). Taxact login However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Taxact login Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Taxact login 9100-2. Taxact login ” File the amended return at the same address you filed the original return. Taxact login Foreign development costs. Taxact login   The rules discussed earlier for foreign exploration costs apply to foreign development costs. Taxact login Reduced corporate deductions for development costs. Taxact login   The rules discussed earlier for reduced corporate deductions for exploration costs also apply to corporate deductions for development costs. Taxact login Circulation Costs A publisher can deduct as a current business expense the costs of establishing, maintaining, or increasing the circulation of a newspaper, magazine, or other periodical. Taxact login For example, a publisher can deduct the cost of hiring extra employees for a limited time to get new subscriptions through telephone calls. Taxact login Circulation costs are deductible even if they normally would be capitalized. Taxact login This rule does not apply to the following costs that must be capitalized. Taxact login The purchase of land or depreciable property. Taxact login The acquisition of circulation through the purchase of any part of the business of another publisher of a newspaper, magazine, or other periodical, including the purchase of another publisher's list of subscribers. Taxact login Other treatment of circulation costs. Taxact login   If you do not want to deduct circulation costs as a current business expense, you can elect one of the following ways to recover these costs. Taxact login Capitalize all circulation costs that are properly chargeable to a capital account (see chapter 1 ). Taxact login Amortize circulation costs over the 3-year period beginning with the tax year they were paid or incurred. Taxact login How to make the election. Taxact login   You elect to capitalize circulation costs by attaching a statement to your return for the first tax year the election applies. Taxact login Your election is binding for the year it is made and for all later years, unless you get IRS approval to revoke it. Taxact login Business Start-Up and Organizational Costs Business start-up and organizational costs are generally capital expenditures. Taxact login However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. Taxact login The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Taxact login Any remaining costs must be amortized. Taxact login For information about amortizing start-up and organizational costs, see chapter 8 . Taxact login Start-up costs include any amounts paid or incurred in connection with creating an active trade or business or investigating the creation or acquisition of an active trade or business. Taxact login Organizational costs include the costs of creating a corporation. Taxact login For more information on start-up and organizational costs, see chapter 8 . Taxact login How to make the election. Taxact login   You elect to deduct the start-up or organizational costs by claiming the deduction on your income tax return (filed by the due date including extensions) for the tax year in which the active trade or business begins. Taxact login However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Taxact login Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Taxact login 9100-2. Taxact login ” File the amended return at the same address you filed the original return. Taxact login The election applies when computing taxable income for the current tax year and all subsequent years. Taxact login Reforestation Costs Reforestation costs are generally capital expenditures. Taxact login However, you can elect to deduct up to $10,000 ($5,000 if married filing separately; $0 for a trust) of qualifying reforestation costs paid or incurred after October 22, 2004, for each qualified timber property. Taxact login The remaining costs can be amortized over an 84-month period. Taxact login For information about amortizing reforestation costs, see chapter 8 . Taxact login Qualifying reforestation costs are the direct costs of planting or seeding for forestation or reforestation. Taxact login Qualified timber property is property that contains trees in significant commercial quantities. Taxact login See chapter 8 for more information on qualifying reforestation costs and qualified timber property. Taxact login If you elect to deduct qualified reforestation costs, create and maintain separate timber accounts for each qualified timber property and include all reforestation costs and the dates each was applied. Taxact login Do not include this qualified timber property in any account (for example, depletion block) for which depletion is allowed. Taxact login How to make the election. Taxact login   You elect to deduct qualifying reforestation costs by claiming the deduction on your timely filed income tax return (including extensions) for the tax year the expenses were paid or incurred. Taxact login If Form T (Timber), Forest Activities Schedule, is required, complete Part IV of Form T. Taxact login If Form T is not required, attach a statement containing the following information for each qualified timber property for which an election is being made. Taxact login The unique stand identification numbers. Taxact login The total number of acres reforested during the tax year. Taxact login The nature of the reforestation treatments. Taxact login The total amounts of qualified reforestation expenditures eligible to be amortized or deducted. Taxact login   If you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Taxact login Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Taxact login 9100-2. Taxact login ” File the amended return at the same address you filed the original return. Taxact login The election applies when computing taxable income for the current tax year and all subsequent years. Taxact login   For additional information on reforestation costs, see chapter 8 . Taxact login Recapture. Taxact login   This deduction may have to be recaptured as ordinary income under section 1245 when you sell or otherwise dispose of the property that would have received an addition to basis if you had not elected to deduct the expenditure. Taxact login For more information on recapturing the deduction, see Depreciation Recapture in Publication 544. Taxact login Retired Asset Removal Costs If you retire and remove a depreciable asset in connection with the installation or production of a replacement asset, you can deduct the costs of removing the retired asset. Taxact login However, if you replace a component (part) of a depreciable asset, capitalize the removal costs if the replacement is an improvement and deduct the costs if the replacement is a repair. Taxact login Barrier Removal Costs The cost of an improvement to a business asset is normally a capital expense. Taxact login However, you can elect to deduct the costs of making a facility or public transportation vehicle more accessible to and usable by those who are disabled or elderly. Taxact login You must own or lease the facility or vehicle for use in connection with your trade or business. Taxact login A facility is all or any part of buildings, structures, equipment, roads, walks, parking lots, or similar real or personal property. Taxact login A public transportation vehicle is a vehicle, such as a bus or railroad car, that provides transportation service to the public (including service for your customers, even if you are not in the business of providing transportation services). Taxact login You cannot deduct any costs that you paid or incurred to completely renovate or build a facility or public transportation vehicle or to replace depreciable property in the normal course of business. Taxact login Deduction limit. Taxact login   The most you can deduct as a cost of removing barriers to the disabled and the elderly for any tax year is $15,000. Taxact login However, you can add any costs over this limit to the basis of the property and depreciate these excess costs. Taxact login Partners and partnerships. Taxact login   The $15,000 limit applies to a partnership and also to each partner in the partnership. Taxact login A partner can allocate the $15,000 limit in any manner among the partner's individually incurred costs and the partner's distributive share of partnership costs. Taxact login If the partner cannot deduct the entire share of partnership costs, the partnership can add any costs not deducted to the basis of the improved property. Taxact login   A partnership must be able to show that any amount added to basis was not deducted by the partner and that it was over a partner's $15,000 limit (as determined by the partner). Taxact login If the partnership cannot show this, it is presumed that the partner was able to deduct the distributive share of the partnership's costs in full. Taxact login Example. Taxact login Emilio Azul's distributive share of ABC partnership's deductible expenses for the removal of architectural barriers was $14,000. Taxact login Emilio had $12,000 of similar expenses in his sole proprietorship. Taxact login He elected to deduct $7,000 of them. Taxact login Emilio allocated the remaining $8,000 of the $15,000 limit to his share of ABC's expenses. Taxact login Emilio can add the excess $5,000 of his own expenses to the basis of the property used in his business. Taxact login Also, if ABC can show that Emilio could not deduct $6,000 ($14,000 – $8,000) of his share of the partnership's expenses because of how Emilio applied the limit, ABC can add $6,000 to the basis of its property. Taxact login Qualification standards. Taxact login   You can deduct your costs as a current expense only if the barrier removal meets the guidelines and requirements issued by the Architectural and Transportation Barriers Compliance Board under the Americans with Disabilities Act (ADA) of 1990. Taxact login You can view the Americans with Disabilities Act at www. Taxact login ada. Taxact login gov/pubs/ada. Taxact login htm. Taxact login   The following is a list of some architectural barrier removal costs that can be deducted. Taxact login Ground and floor surfaces. Taxact login Walks. Taxact login Parking lots. Taxact login Ramps. Taxact login Entrances. Taxact login Doors and doorways. Taxact login Stairs. Taxact login Floors. Taxact login Toilet rooms. Taxact login Water fountains. Taxact login Public telephones. Taxact login Elevators. Taxact login Controls. Taxact login Signage. Taxact login Alarms. Taxact login Protruding objects. Taxact login Symbols of accessibility. Taxact login You can find the ADA guidelines and requirements for architectural barrier removal at www. Taxact login usdoj. Taxact login gov/crt/ada/reg3a. Taxact login html. Taxact login   The costs for removal of transportation barriers from rail facilities, buses, and rapid and light rail vehicles are deductible. Taxact login You can find the guidelines and requirements for transportation barrier removal at www. Taxact login fta. Taxact login dot. Taxact login gov. Taxact login   Also, you can access the ADA website at www. Taxact login ada. Taxact login gov for additional information. Taxact login Other barrier removals. Taxact login   To be deductible, expenses of removing any barrier not covered by the above standards must meet all three of the following tests. Taxact login The removed barrier must be a substantial barrier to access or use of a facility or public transportation vehicle by persons who have a disability or are elderly. Taxact login The removed barrier must have been a barrier for at least one major group of persons who have a disability or are elderly (such as people who are blind, deaf, or wheelchair users). Taxact login The barrier must be removed without creating any new barrier that significantly impairs access to or use of the facility or vehicle by a major group of persons who have a disability or are elderly. Taxact login How to make the election. Taxact login   If you elect to deduct your costs for removing barriers to the disabled or the elderly, claim the deduction on your income tax return (partnership return for partnerships) for the tax year the expenses were paid or incurred. Taxact login Identify the deduction as a separate item. Taxact login The election applies to all the qualifying costs you have during the year, up to the $15,000 limit. Taxact login If you make this election, you must maintain adequate records to support your deduction. Taxact login   For your election to be valid, you generally must file your return by its due date, including extensions. Taxact login However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Taxact login Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Taxact login 9100-2. Taxact login ” File the amended return at the same address you filed the original return. Taxact login Your election is irrevocable after the due date, including extensions, of your return. Taxact login Disabled access credit. Taxact login   If you make your business accessible to persons with disabilities and your business is an eligible small business, you may be able to claim the disabled access credit. Taxact login If you choose to claim the credit, you must reduce the amount you deduct or capitalize by the amount of the credit. Taxact login   For more information, see Form 8826, Disabled Access Credit. Taxact login Film and Television Production Costs Film and television production costs are generally capital expenses. Taxact login However, you can elect to deduct costs paid or incurred for certain productions commencing before January 1, 2014. Taxact login For more information, see section 181 of the Internal Revenue Code and the related Treasury Regulations. 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