Glossary

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Capital Expenditure
A capital expenditure is anything that you purchase that adds value to something. The value can be added to a business, vehicle or a home. Furniture and equipment are the most common types of expenditures. Most purchases will benefit the home or business for more than a year. A large expenditure that you can add to your home that will increase the value could be a garage or a swimming pool. Expenditures can be depreciated for up to 39 years; this is only for tax purposes. Some repairs to buildings can be considered capital expenditures if they improve the condition of the building, including asbestos removal or the installation of smoke alarms. Some additions must be deducted within a specified number of years, and others can be used as a business expense.