Help With Remodel Cost/Depreciation

[WImom]

Need some help… We remodeled our daycare space. It is part of our house but is a dedicated space just for daycare (was formally our living room/dining room). We put in a Counter, Cabinets, Built in cubbies, painted, and replaced flooring. She is saying we cannot use a 100% percentage and it would be T/S because these items are part of the structure of the house because they are attached to the house. This space is used 100% for the daycare. The room is completely separated by a door from the rest of my home. (Parents use my main door and then come in the daycare doorway to enter the daycare space). I’m confused because these items wouldn’t be here without the daycare and if I closed the daycare they would be removed.
I’m only able to get $17.00 depreciation this year from my $5000 remodel the way my tax person has this set up.

Is this correct?

[Michael]

I placed some related TAGs below that may be helpful.

[WImom]

Thanks for the tags but I didn't find my answer so still need Tom's help please! I'm paying $7100 this year, yikes!!!!

[TomCopeland]

Depreciation

Need some help… We remodeled our daycare space. It is part of our house but is a dedicated space just for daycare (was formally our living room/dining room). We put in a Counter, Cabinets, Built in cubbies, painted, and replaced flooring. She is saying we cannot use a 100% percentage and it would be T/S because these items are part of the structure of the house because they are attached to the house. This space is used 100% for the daycare. The room is completely separated by a door from the rest of my home. (Parents use my main door and then come in the daycare doorway to enter the daycare space). I’m confused because these items wouldn’t be here without the daycare and if I closed the daycare they would be removed.
I’m only able to get $17.00 depreciation this year from my $5000 remodel the way my tax person has this set up.

Is this correct?

I am assuming you never use this room for personal purposes. If so, you can depreciate 100% of the cost of this remodeling project. The logic that your tax preparer is using is wrong. Just because the room is attached to the home doesn't mean it can never be used 100% of the time for your business.

[WImom]

Thanks Tom!! Do you happen to know of a publication I can send her to back myself up?

Also, I see carpet qualifies for the 50% bonus correct? Does Lineolum as well? I had included that in our "remodel". Should I have seperated that out?

[TomCopeland]

Depreciation

Thanks Tom!! Do you happen to know of a publication I can send her to back myself up?

Also, I see carpet qualifies for the 50% bonus correct? Does Lineolum as well? I had included that in our "remodel". Should I have seperated that out?

Look at the IRS Child Care Audit Techniques Guide:http://www.irs.gov/Businesses/Small-...seintroduction

Carpet and lineolum also qualify for the 50% rule, if you want to separate it out.

[WImom]

Thanks for your help!