A company incurred costs of studio fees, mixing, song writing, and musicians' fees in producing a music CD. If these are capital expenditures, what class do they fall in? CRA stated:
[P]aragraph 15 of IT-283R2 [states]:
"The capital cost of a master recording medium (e.g., a tape or disk) used in the music industry for the making of records, tapes and compact disks is considered to include the costs related to the production of the master recording medium. Such costs would include applicable overhead plus expenditures for
(a) scripts, musical arrangements and materials,
(b) remuneration of writers, producers, directors, musicians, performers and technicians, and
(c) the rental or other costs of a studio and of sound recording and other equipment."
While IT-283R2 has been archived … the above statement … is still valid. …
In regard to the CCA class, paragraph 8 of IT-472 [states]:
" … The Department considers the following property to be so included in Class 8:
... (q) A master audio-tape or a master disc used in the phonograph record industry. However, a master die (stamper) for processing records is a Class 12;"