You’ve heard it all before: You don’t have to have $100 million in cash to be eligible for a $500,000 bonus.

But when you have $250 million in the bank, you’re allowed to deduct up to $100,000 of that, the Internal Revenue Service (IRS) announced this week.

The rule was a boon for companies like KFC, which earned a $4.6 billion profit in the first quarter.

KFC’s owners, McDonald’s, said they had to deduct $5.3 billion of the $6.3 trillion it earned, a loss that was partially offset by an $8.9 billion profit.KFC’s deduction was first reported by Forbes. 

A KFC spokesperson said in a statement:The $500 million deduction is only for cash assets and is not an allowable deduction for investments.

The deduction for capital expenditures is $500 per quarter, which allows us to reinvest our cash in new, capital-intensive products and services.

We do not have any cash on hand that would allow us to take advantage of this deduction.

The $250M deduction is a deduction for all assets and cannot be taken for capital expenditure.

KFO said in the statement that it is not a deduction in the same way.

A KFO spokesperson told Business Insider that the company does not take deductions for depreciation and amortization, a category that includes depreciation and an allowance for capital investments.”KFO is not the only restaurant company that has to deduct the capital expenses for certain capital expenditures, such as depreciation, amortizations and capital equipment costs,” the spokesperson said.

“In other words, the IRS is not exempting these deductions from the $250K limit.”

The IRS said that the $500k deduction for cash is limited to a $250,000 deduction for any business or individual owner, and that there are no limits on the other types of deductions.

“These deductions are used to provide a deduction to help offset costs incurred by the owners of a business or a small business in complying with tax laws, but we are not making a deduction on these expenses as a deduction,” the IRS said in an FAQ on the deduction. 

KFO also said that any amount of money the company earned in the past was not subject to a capital expense deduction.

“Any amounts of cash the company received or spent during the last fiscal year that were not capitalized in the last year are not deductible,” the company said.

The IRS released a statement on Tuesday clarifying that “this deduction is not for capital expenses.”

“Capital expenses include the purchase of tangible personal property, such at an acquisition price of $500,” the statement read.

“Capital expenditures do not include expenditures that are not capital.

This distinction has been important to KFO in recent years, when capital expenditures and expenses of other businesses, such on equipment and capital investment, were considered capital expenditures.””KFC is the only company in our industry that has not had to use this deduction,” said a spokesperson for KFO.

“This is the IRS’ first clarification that capital expenditures are not considered capital expenses under the deduction limits.

We believe this clarification is an important step in helping all businesses and individuals realize their tax savings through the deductions they receive from KFO.”

This story was updated at 4:05 p.m.

ET.KFO says deduction for depreciation was not a deductible, but KFO says no, deduction is allowed for capital.

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