Buildings and other real property items, components, improvements and leasehold improvements must be capitalized if they are:

(1) Required or authorized by the lease agreement;

(2) Cost more than five hundred dollars; and

(3) Involve at least one of the following:

(a) Increase the interior floor space of the structure;

(b) Increase or renew paved areas outside the structure that are either adjacent to the structure or provide access to it;

(c) Modification to the exterior or interior walls of the structure;

(d) Installation of additional heating, cooling, electrical, water-related, or similar fixed equipment;

(e) Landscaping or redecorating; or

(f) Increasing the structure's useful life by at least two years.