Home Write-Offs

[Firefly]

If we put in a fireplace would we be able to write off the cost? Also what about finishing a basement? Would there be any tax benefit to that? Or would it just be the t/s that would change if I used part of it for daycare?

[TomCopeland]

Originally Posted by Firefly

If we put in a fireplace would we be able to write off the cost? Also what about finishing a basement? Would there be any tax benefit to that? Or would it just be the t/s that would change if I used part of it for daycare?

If you use the fireplace in your business you could deduct time-space% of the cost. Same for the basement. If either costs are less than $2,500 you can deduct the business portion in one year. If more, then treat them as a home improvement and depreciate over 39 years.

[buddie65]

We had to put in a new water heater in 2019...the old one quit. The cost was under $2,000. I realize other appliances would use the T/ space percent in one year but was not sure if this qualified for this method as well ?

[Sunshine69]

I believe it would qualify. You use your hot water heater to wash daycare pots/pans, dishes and do daycare laundry and wash the little one’s hands, don’t you?

[TomCopeland]

Originally Posted by buddie65

We had to put in a new water heater in 2019...the old one quit. The cost was under $2,000. I realize other appliances would use the T/ space percent in one year but was not sure if this qualified for this method as well ?

Providers can deduct the business portion of any expense in one year, without having to depreciate it. The exceptions are the purchase of a home, home improvement and home addition.

Do I have to depreciate a new ac/heat pump ($6500), or can this be expensed in one year? I’m hearing conflicting answers.

[TomCopeland]

Originally Posted by Unregistered

Do I have to depreciate a new ac/heat pump ($6500), or can this be expensed in one year? I’m hearing conflicting answers.

This sounds like a home improvement that should be depreciated over 39 years and it represents more than half of the cooling/heating system in your home. See my article about exceptions to this rule:http://tomcopelandblog.com/how-to-de...me-improvement