My4SunshineGirlsNY 09:38 AM 01-13-2011
So now I know I really should depreciate my home, and can't figure out HOW to calculate it. I use Minute Menu and it doesn't calculate it for me. I have all the info I need...Bassis of home for depreciation is $107,195.16..purchased the home in Nov. 2004 so I'm assuming that is the "date placed in service"...my business started Sept. 1st 2009. So how do I calculate the yearly depreciation? Should I worry about this or just take these numbers to my tax accountant?
TomCopeland 10:04 AM 01-13-2011
Short answer - take this to your tax preparer. We didn't add the details of depreciation in Minute Menu because it's too complicated.
A little longer answer - Take the purchase price of your home and subtract from it the value of land at the time you bought it. Then add to this total any home improvements you made before your business began. Multiply this by your time-space %. This total is the business basis of your home. The date place in business is the date your business began, not the date you purchased your home. Depreciate your home over 39 years.
For details on how to do this, see my 2010 Family Child Care Tax Workbook and Organizer.
My4SunshineGirlsNY 10:30 AM 01-13-2011
Thank you Tom!