Taxes have little to do with this--- this is an economics/mgt question........ If current cash, probably intended to be used for current needs/working capital..... is consumed by using it for long term expenditures (roofs, for example, normally are not converted back into cash until the property is sold)........ on the assumption it can always be borrowed back if needed since there is additional equity resulting from the capital expenditure.......or just because the borrower believes he has a sacred relationship with his bank....... the borrower had better be sure that the banks are going to be in a lending environment at the time the cash is needed so that the money can be re-obtained......if times have changed, and loans are hard to get, that cash laying in the capital item instead of the checking account is going to be pretty near and dear. It is called "asset protection".......and if the cost is not much, smart money will protect itself. | 
bank rant
