Help - Another Depreciation Question

[llove530]

We had to purchase a new heating/ac unit for our house. I use 100% of my home for my daycare. The unit was very costly. How do I write this off on my business taxes. I also included it on personal for the energy credit. Help!

[DCMomOf3]

welcome! You would use the time/space %. I am not sure how the tax credit affects it though.

[llove530]

I would put it under depreciation though and not an expense right?

[DCMomOf3]

I believe yes.

[llove530]

Do I have to figure out the time / space % myself and then put in that figure?

[TomCopeland]

You can deduct the time-space percentage of the cost of a new heating/ac system. Since this is a home improvement, you must depreciate it over 39 years.

Assuming your heating/ac system was energy efficient, you may also be entitled to claim a federal energy tax credit. See my recent blog post on this: http://tinyurl.com/4rn3hmw

The blog post says that you can't claim the maximum energy tax credit if your time-space percentage was over 20%.

[llove530]

I am claiming the Energy Credit on my personal taxes and not business.

Wow 39 yrs. that is a long time !!

[TomCopeland]

Yes, 39 years is a long time! Claim the energy credit on your personal tax return, not your business tax forms.