Question: Corporation J manufactures electrical appliances Corporation K provides architectural services
Corporation J manufactures electrical appliances. Corporation K provides architectural services. During the year, both corporations paid $56,000 annual premiums to carry fire and casualty insurance on their tangible assets. Corporation J was required to capitalize the $56,000 cost for tax purposes while Corporation K was allowed a $56,000 deduction. Can you explain this difference in tax treatment between the two corporations?
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