Question On Our Newly Finished Basement

[Crazy8]

We signed contract to demo and refinish our basement back in November 2015, deposits were paid and work started. Payments were due with each phase of work but final payment was not due until January 2016. Can I still claim the entire expense on my 2015 taxes?

And I assume I have to depreciate the expense over many years, correct? (amount paid was over $16k).

Does paint, carpet, furniture, etc. all need to be included in the above even if we paid for and bought all those items separately?

The basement is NOT used for daycare but my home office is down there and a large walk in closet will hold all craft supplies, toys for rotation, baby items not in use, etc.

[TomCopeland]

Originally Posted by Crazy8

We signed contract to demo and refinish our basement back in November 2015, deposits were paid and work started. Payments were due with each phase of work but final payment was not due until January 2016. Can I still claim the entire expense on my 2015 taxes?

And I assume I have to depreciate the expense over many years, correct? (amount paid was over $16k).

Does paint, carpet, furniture, etc. all need to be included in the above even if we paid for and bought all those items separately?

The basement is NOT used for daycare but my home office is down there and a large walk in closet will hold all craft supplies, toys for rotation, baby items not in use, etc.

You can start depreciating this in 2015. As a home improvement you must add all costs together except the carpet and furniture and depreciate over 39 years. If the carpet and furniture individually cost less than $2,500 you can deduct them in one year. If the carpet and furniture cost more than $2,500 you can depreciate them over 7 years and use the 50% bonus depreciation rule.