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<br />28. Origination fee in connection wi~~.h a lease. <br />- - 29. Fair market value of property given up in Section 1031 <br />like-kind exchange. <br />30. Expenditures to retire a portion of a prior exempt <br />- small issue; however, only to the extent pai d or in- <br />- curred within the six-year period. Treas. Reg. <br />§1.103-10(f) Example 10; Rev. Rul. 76-98, 1976-1 C.B. <br />31. <br />The following are representative examples of ex- _~' <br />penditures which are not "Section 103(b)(6)(D) capital ex- <br />penditures": <br />- - 1. Administrative costs, overhead, and wages-(unless allo- <br />cable to the acc_ruisition, construction, or erection of - <br />_ _ property riescribed in "1. ~' above) : <br />2. Cost of incidental repairs or mzintenance. See Treas. <br />- Reg. §1:263(a)-1(b). ~ - <br />- -~ <br />3.' Cost of property which would p_r©perly be included in <br />- inventory if on hand at the erid~of L~he taxable year <br />[i:e., direct inventory costs]. LTR 8015025. See IRC <br />§§1221(1}, 1231(-b)(1)(A).- <br />- 4. Purchase of cash, accounts receivable and prepaid <br />expenses. LTR 8015025. <br />5. host of property held primarily for sale tc customers <br />in the ordinary course of a trade or business if not <br />used in the trade or business until sold. See IRC <br />§§1221{1), 1231(b)(I)(B); Rev. Rul. 62-141, 1962-2 C.B. <br />182. <br />6. Cost of supplies (defined as property which does not <br />have a useT•11 life substantially beyond the taxable <br />year when ac ~:ired). <br />7. Periodic rent payments under a true lease for federal <br />income tax purposes (Rev. Rul. 77-353, 1977-2 C.B. 44); <br />but lessor's expenditures for the leased item are capi- <br />tal expenditures' if made within the six-year period <br />unless the leased-item is described in "7." below. <br />