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Old 03-01-2018, 10:11 AM
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Default TQFT New Depreciation Laws For Home Improvement

So I read your blog, about the new tax laws. It's a lot to take in, and I want to check my understanding on it.

If I understand correctly, a home improvement that is less than 2% of the home's value can be depreciated in one year. Is that right?

And this is true for the next five years. Is that right?

And if it's less than $2500, it can be an expense. Is that right?

So, getting down to brass tacks...if I spent $2499 on new concrete to turn our driveway into a circle driveway for our home businesses (daycare parents and DH does lawns, so a circle driveway is also good for his trailer), it would be an expense even though it's a permanent part of our home. Is that right?

If our home is worth $275,000 on our property tax statement, does that mean we can spend $5500 on a home improvement and depreciate it all in one year for the next five years?

What about a concrete pad for outdoor ball sports? What about a gazebo or framework for a portico over our current concrete pad? What about a covered addition that happened to be on footings, like a sunroom, or part of a sunroom?

And THANK YOU!!!! You help all of us, Tom.
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Old 03-01-2018, 02:35 PM
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Default expenses

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Originally Posted by Mom2Two View Post
So I read your blog, about the new tax laws. It's a lot to take in, and I want to check my understanding on it.

If I understand correctly, a home improvement that is less than 2% of the home's value can be depreciated in one year. Is that right?

And this is true for the next five years. Is that right?

And if it's less than $2500, it can be an expense. Is that right?

So, getting down to brass tacks...if I spent $2499 on new concrete to turn our driveway into a circle driveway for our home businesses (daycare parents and DH does lawns, so a circle driveway is also good for his trailer), it would be an expense even though it's a permanent part of our home. Is that right?

If our home is worth $275,000 on our property tax statement, does that mean we can spend $5500 on a home improvement and depreciate it all in one year for the next five years?

What about a concrete pad for outdoor ball sports? What about a gazebo or framework for a portico over our current concrete pad? What about a covered addition that happened to be on footings, like a sunroom, or part of a sunroom?

And THANK YOU!!!! You help all of us, Tom.
You can deduct the concrete in one year using your time-space% because it cost less than $2,500.
To take advantage of the Safe Harbor for Small Taxpayers rule, your home improvements and repairs in one year must be less than 2% of the purchase price of your home (minus the value of the land at the time you bought it, plus any home improvements you made before the current tax year). This rule is permanent.

As to the concrete pad and gazebo - if it costs less than $2,500 you can deduct the business portion in one year. If it costs more than $2,500 and you purchased it after September 27, 2017 you can deduct the business portion in one year! If it's an addition to your home, you must depreciate it over 39 years.
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Old 03-01-2018, 02:37 PM
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So even it's made from concrete, and therefore stuck to the land, I can still depreciate it quickly? Is an addition only something that is attached to the house?
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Old 03-02-2018, 09:11 AM
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So even it's made from concrete, and therefore stuck to the land, I can still depreciate it quickly? Is an addition only something that is attached to the house?
Since the concrete cost less than $2,500 it can be deducted in one year. Any item costing less than $2,500 can be deducted in one year. An addition would be a new room, deck or other separate structure that is permanently attached to the land.
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Old 03-02-2018, 01:11 PM
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So, pretending for a moment that I have a very nice brother would would add on a sunroom for $2499, I could still deduct it in one year, even though it's an addition. Is that right?

Sorry for hashing this to death, but I just want to make sure I understand.
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Old 03-02-2018, 06:40 PM
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Default $2,500 rule

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So, pretending for a moment that I have a very nice brother would would add on a sunroom for $2499, I could still deduct it in one year, even though it's an addition. Is that right?

Sorry for hashing this to death, but I just want to make sure I understand.
Yes, it's less than $2,500 so it can be deducted in one year, no matter what it is.
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