Question

Uniform capitalization of indirect inventory costs is required for most very large taxpayers.

True or False

Answer 1

Answer is True.

The TCJA expanded the exception for small business taxpayers from the UNICAP rules. Now, any producer or reseller that meets the $25 million($25 million or less of average annual gross receipts) gross receipts test under Sec. 448(c) is exempted from the application of Sec. 263A,earlier it was $10 million or less of average annual gross receipts. This is welcome relief for many small businesses, as the UNICAP calculation under Sec. 263A can be cumbersome and tedious.

Now Uniform capitalization of indirect inventory costs is required for most very large taxpayers.