Depreciation Question

[WImom]

JUst wanted to check. We put in a new fence this year. From what I read below we can deduct the cost all this year correct or not because the fence is part of a land improvement? It's only a fence for the daycare so it's also 100% buisness.



A new 100% bonus depreciation rule allows you to deduct (rather than depreciate) the entire business portion of the following new items in 2011: furniture, appliances, office equipment, and fences. Homes and home improvements are not eligible for this rule.

[TomCopeland]

Yes, a fence is a land improvement and a land improvement is eligible for the 100% bonus depreciation rule. Since your fence is only for the daycare, you can deduct 100% of the cost of the fence on Form 4562, line 14.


Join me tomorrow (Feb 9) for my webinar "2011 Family Child Care Tax Update: How to Reduce Your Taxes". For details:http://events.r20.constantcontact.co...&llr=yatrx4cab

[WImom]

thank you! Our current tax person is not doing it that way so I'm glad I saw this! So would a new patio for the daycare space also be included since it's a land improvement? My current tax person has my whole daycare fenced in area (cement, fence, climbing area, sod layed down) as depreciation over time. So would just the fence be all this year or can I do just this year for all of this?

Hopefully I can check in on the webinar.

[TomCopeland]

A new patio is also a land improvement that is eligible for the 100% bonus depreciation rule. Cement walkway and climbing area also follows the same rules. Sod, you should deduct in one year as repair/maintenance.

[WImom]

Thank you!!!

[LittleCupcakes]

Can you do this if your fence is not 100% daycare? Or do I have to depreciate it over 15 years since we do use it for personal use also?

[TomCopeland]

You can also use the 100% bonus depreciation rule on a fence that not used 100% for business. Multiply by your time-space % and deduct it all on Form 4562, line 14.

[LittleCupcakes]

Thank you so much Tom!