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Daycare and Taxes>Fixture vs. Improvement?
LittleScholars 09:05 AM 03-21-2017
I had one accountant prep my taxes and we had another accountant review them. Any advice on which to follow?

Situation: We did a $27,000 home improvement that is, for now, strictly for daycare (exclusive-use full basement renovation). One day our children could, in theory, use the daycare space as a playroom, but we only have a 10 week old and it will be many years before he's ready to access the space independently as a playroom.

Account 1 Recommendation: Depreciate the entire total over 39.5 years.

Account 2 Recommendation: "We should look for more of the basement improvement total to be listed as a fixture vs an improvement. The fixture is anything that is not part of the wall. So the lighting definitely, maybe cabinets, mirror, sinks, toilet, etc. The fixture amounts can go 7 years."

Obviously, #2 would be more beneficial this tax season, but we also want to avoid any issues should we get audited.

Thanks!
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