Section 730, Repairs and Maintenance
Internal Revenue Manual
Specialized Industry Guidelines - Timber
Section 730, Repairs and Maintenance
Last amended: 6-26-1978
Repairs and Maintenance
(1) In accordance with the provisions of IRS 263, no deduction shall be allowed for any amount paid out for new buildings or for permanent improvements of betterments made to increase the value of any property or estate.
(2) The costs of incidental repairs which neither add to the value of the property nor appreciably prolong its life would ordinarily be deductible. However, repairs in the nature of replacement, to the extent that they arrest deterioration, appreciably prolong the life of the property, or adapt it to a different use should be capitalized.
(3) In a review of this account, the examiner should consider the following:
(a) rebuilding and modification of machinery and equipment;
(b) modernization of facilities;
(c) reconditioning and overhauls; and
(d) own labor and overhead applicable to capital jobs.