In a way, yes, you can take a deduction for a building purchased through your business. However, you do not write-off everything you paid. Instead, you add the building as an Asset and take Depreciation Expense. Depreciation expenses allows you to deduct a portion of your Cost Basis each year, over the Useful Life, which is determined by tax depreciation rules. The software will ask you all of the applicable questions to set this up. To enter:
- Go into your Self-employed Income & Expense summary screen and click Edit next to the applicable business
- Next, under Business Assets section (see below if you do not have this section), click Start/Update next to Assets Being Depreciation......If you don't have the Business Assets section, you'll have: Add expenses for this work, which you'll need to select and then click Assets and Continue. Answer through the questions and the software will add the advanced section for entering asset purchases costing more than $2,500. Then you will be able to resume the directions above.
- When you come to the screen titled Describe this Asset you'll select Real Estate Property and begin setting the building up as an asset, which will allow you to take depreciation expense.
