Fence Question

[LittleExplorers]

My own kids are 8 & 10 and we have no personal need for a fence. We are considering one for the purpose of the little daycare kids, mostly toddlers. It would be a small fence as we have a few acres and only want to enclose the play area. However, it would include the play set my own kids use. Can this be a 100% write off as I have no reason to fence in my own kids?

[TomCopeland]

Originally Posted by LittleExplorers

My own kids are 8 & 10 and we have no personal need for a fence. We are considering one for the purpose of the little daycare kids, mostly toddlers. It would be a small fence as we have a few acres and only want to enclose the play area. However, it would include the play set my own kids use. Can this be a 100% write off as I have no reason to fence in my own kids?

The conservative answer: deduct your time-space% of the cost. Why? Because your own children do get the benefit of the fence.
The assertive answer: deduct 100% of the cost. Why? Because you wouldn't put up a fence except for your business.
The compromise answer: Deduct the business use percent of the cost based on how many hours in a typical week it is used for business purposes. So, if you have 6 day care children in the play area 2 hours a day x 5 days a week = 60 hours of business use per week. Two of your own children in the play area 2 hours a day x 7 days a week = 28 hours of person use per week. 60 divided by 88 hours = 68% business use.
No matter what the cost of the fence, you can deduct it in one year.

[LittleExplorers]

Originally Posted by TomCopeland

The conservative answer: deduct your time-space% of the cost. Why? Because your own children do get the benefit of the fence.
The assertive answer: deduct 100% of the cost. Why? Because you wouldn't put up a fence except for your business.
The compromise answer: Deduct the business use percent of the cost based on how many hours in a typical week it is used for business purposes. So, if you have 6 day care children in the play area 2 hours a day x 5 days a week = 60 hours of business use per week. Two of your own children in the play area 2 hours a day x 7 days a week = 28 hours of person use per week. 60 divided by 88 hours = 68% business use.
No matter what the cost of the fence, you can deduct it in one year.

Thank you for your perspective. What records should I keep from tracking and how long if I want to use the compromise way?

[TomCopeland]

Originally Posted by LittleExplorers

Thank you for your perspective. What records should I keep from tracking and how long if I want to use the compromise way?

Keep your notes as to how you calculated your actual business use percentage for at least three years after filing your tax return.