> Why is salary for someone building a house deductible, but salary for someone building a for loop a capital expense.

If the “house” (or the for loop) is sold and gone, it’s not an asset and the cost of the goods sold — salaries included - is an expense.

If the “house” (or the for loop) is kept and used, it’s an asset and the cost of producing the asset — salaries included - is capitalized.

(There are differences betweeen the “house” and the for loop but not at the extremes which are clear. I imagine by “house” you mean some building that makes sense in a commercial or industrial context like a warehouse.)

Salary for building assets generally are capitalizable. Construction companies have a special carve out because they typically are hired to build the assets for someone else and are paid for the completion of the construction work.

A factory worker building a product to be sold is capitalized into inventory

The product can be capitalised into inventory. The factory worker's salary is just a cost.

The key thing here is that while you generally are expected to and allowed to consider a produced good an asset, it's not assumed that paying someone salary translates immediately into an asset... unless it's software under this new rule for some reason