Capitalizing payroll Cancel The title field is required!

1. Tom Feller

   

   0 posts
   
   6/26/2013 9:06 AM

   I am at a private club that is in the process of starting a restoration project with most of the work being done "in-house". Is it a normal process to capitalize all payroll(salary and hourly including the superintendent) that is associated with the project? I have been at clubs that have done it both ways but this is the first time I have heard of capitalizing the Superintendents salary. Any information is appreciated.

   
   
   
   
2. Andy Jorgensen

   

   1 posts
   
   6/26/2013 11:06 AM

   When I do a project involving any building, our in-house construction company charges me Superintendent fees to oversee the project. I don't see how this is any different whether it was you or someone else, they are trying to capture the true costs associated with the project, your labor being one of them.

   
   
   
   
3. Melvin Waldron

   

   43 posts
   
   6/26/2013 12:06 PM

   Great topic really,
   
   Not knowing all that much about things (I know by some of my comments, you should all know that I know nothing), is capitalizing payroll for a project have tax implications? Can the company save money on payroll taxes because there is an improvement to the facilities infrastructure? Is it possible to (just like a piece of equipment or capital improvements) depreciate the payroll somehow used on a capital project? I wonder what is the cost to track all the labor? Does it pay for the tax savings (if there are some), does this mean the tax laws are too complicated?
   
   I wonder if making the tax laws simpler would hinder this type of work?
   
   Maybe all my questions are for another index/thread?
   
   Thanks!
   
   Mel

   
   Melvin H. Waldron III, CGCS, Horton Smith Golf Course, City of Springfield/Greene County MO
   
   
4. Harlyn Goldman

   

   0 posts
   
   7/6/2013 9:07 AM

   This is generally done to include all costs with the project. This way, the entire cost can be recorded, depreciated, and at some point in the future, replaced. If you do not include all costs, you may not be able to "afford" to replace/redo the work when it's again necessary.
   
   Think of it this way: if you hired a company to do the work, all their costs are included as well.

   
   
   
   
5. Scott Lagana

   

   0 posts
   
   9/24/2013 5:09 AM

   In our case I would track the percentage of my time associated with the project. At the end of the year I would send a memo to the BOD outlining the percentage of my time allocated to the project, plus the total staff wages spent on the project. This would be a recored for the auditors when they pulled the payroll out of operating and capitalized it.
   
   Best,
   Scott Lagana, CGCS

   
   
   
   
6. Corey Eastwood

   

   80 posts
   
   9/24/2013 11:09 AM

   The key to Capitalizing in house labor for the project is Depreciation of the finished product for tax savings.

   
   Corey Eastwood CGCS, Stockton Golf & CC, Retired