Investment in Tangible Properties in North Carolina (G.S. 105-122(d)) Basis for the Investment In order to calculate the investment in tangible properties in North Carolina, include the original purchase price of tangible properties plus additions and improvements and less reserve for depreciation permitted for income tax purposes of all tangible property, including real estate located in North Carolina at the end of the income year immediately preceding the due date of the return. What is Includable in the Investment Calculation (17 NCAC 05B.1302) Include all tangible assets located in North Carolina at original purchase price less reserve for depreciation permitted for income tax purposes. In addition to the types of property listed in the schedule, include all other tangible property owned such as supplies and tools. Typical items of tangible property include: inventory (valued at actual cost or by method consistent with the actual flow of goods), consigned inventories to be included by consignor, machinery and equipment, furniture and fixtures, containers, tools and supplies, land, buildings, leasehold improvements, and all other tangible assets. Treatment of Construction in Progress (17 NCAC 05B.1303) Construction in progress is excluded from this base only if such property is not owned by the corporation filing the return. Determination of Inclusion Based on Depreciation Deduction (17 NCAC 05B.1309) When two or more corporations are in doubt as to which should include property, including leased property, in the calculation of the investment in tangible property, such property shall be included by the corporation allowed depreciation under the Federal Code. Holding Company There is no limitation on the franchise tax payable by a holding company on its investment in tangible property in North Carolina.