depreciation

[ron2024]

What are the useful life of the following assets: All of the following assets are used in a Restaurant Business 1) signage 2) reach-in freeze 3) food warmer 4) kitchen floor replacemen 5) Kitchenware 6) table for customers use

[DaveF1006]

It depends.  Restaurant signs have a useful life of 15 years, except for signs with LED's. Sign with Led's have a useful life of 5-years according to this IRS source. For the Reach-in Freezer, Food Warmer, eating utensils and table, these would have a useful life of 7 years. This is mentioned in Publication 946  in the section Which Property Class Applies Under GDS because it is a property that does not have a class life and has not been designated by law as being in any other class.

The kitchen floor is a permanent part of the building so this is depreciated for 39 years using a Alternative Depreciation Schedule (ADS) straight-line method.

[ron2024]

Thank you. We don't own the property, does the flooring belongs to the leasehold depreciation? Thank you so much

[DaveF1006]

Yes, you depreciate it as a leasehold improvement. Qualified leasehold improvement property,” like qualified improvement property is depreciated over 15-years using the straight-line method under MACRS and qualifies for bonus depreciation and section 179 expensing.

Leasehold Improvements