If I pay $1,000,000 for a piece of real estate and run a bakery out of the bottom that brings in $100,000 per year, I cannot write off $100,000 of the $1,000,000 investment the first year. I would have lost money on paper but have to pay taxes because I didn't lose any money in reality as the asset is still likely worth $1,000,000.
Conversely, if I buy a bunch of computers to fill a leased building for a call center, I can depreciate the electronics on a 5 year schedule because their value is expected to be reducted proportionally. I can also write off the entire leasing expense as it I didn't realize an asset from this cost.
Appreciation can go into the income statement and get taxed. There are different methods of accounting that companies can adopt and some investments will get taxed while others won't. Mining accounting is different from what I gather as there are specific issues that we need to tailor the tax code to. We make special laws for every industry and have all that GAAP and FASB crap...
Conversely, if I buy a bunch of computers to fill a leased building for a call center, I can depreciate the electronics on a 5 year schedule because their value is expected to be reducted proportionally. I can also write off the entire leasing expense as it I didn't realize an asset from this cost.
Appreciation can go into the income statement and get taxed. There are different methods of accounting that companies can adopt and some investments will get taxed while others won't. Mining accounting is different from what I gather as there are specific issues that we need to tailor the tax code to. We make special laws for every industry and have all that GAAP and FASB crap...