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llove530 01-08-2011 02:47 AM

Help - Another Depreciation Question
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 01-08-2011 04:31 AM

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

llove530 01-08-2011 05:16 AM

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

DCMomOf3 01-08-2011 05:50 AM

I believe yes. :)

llove530 01-09-2011 04:16 AM

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

TomCopeland 01-10-2011 07:54 AM

Energy Tax Credit
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:

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

llove530 01-10-2011 02:44 PM

For Tom again!!
I am claiming the Energy Credit on my personal taxes and not business.

Wow 39 yrs. that is a long time !!

TomCopeland 01-11-2011 10:24 AM

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

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