Assets & Depreciations for Business

[Karebear]

We bought two sheds for our business and laid concrete for the foundations and a driveway to them. The questions aren't helpful. First I'm asked if this is a building improvement, which I said "no" to and then it asks me to categorize them: 1. Computer, video, photo, and television equipment, 2. Tools, Machinery, equipment, and furniture 3. Real estate property and 4. Intangibles, other property. None of these categories seem to fit. We conduct business on our residential property. Also, one shed is less than $2500 and the other is over. My friend, who is a tax accountant, says we can expense one of the sheds and then depreciate the other shed and the concrete. She said they would be either 15 or 20 years depending if we're using a regular depreciation method or accelerated. Turbotax didn't lead me to these types of deprecations, so I don't know how to proceed in claiming them. The depreciation period that it did do was insanely long, so I just deleted everything. How do I claim them?

[AnnetteB6]

The shed that was less than $2500 can be included as a business expense under the Safe Harbor election.  

The other shed and the concrete do need to be depreciated as an Asset.  Since this is not a common item being depreciated, TurboTax does not have an easy category for you to use to enter the information:  You will need to enter the depreciation as follows when you have selected to enter an Asset:

• Choose the last option on the list, Intangibles, Other Property, then click Continue.
• On the next page titled, Tell Us a Little More, select Other asset type, then click Continue.
• Enter the detailed information about the asset:  description, cost, date purchased or acquired.  Click Continue.
• Continue with additional details on the next screen, then click Continue.
• Select the appropriate Asset Class, such as 15 years which includes 'roads' then click Continue.
• Choose the 150% Declining Balance depreciation method, then click Continue.
• Enter 15 years as the recovery period, then click Continue.
• Answer No to the question regarding Listed Property, then click Continue. 
• Make your selection about spreading the deduction over several years, then click Continue.
• Finally, you will see an Asset Summary screen with the current year depreciation amount listed.  There is also a check-box here to Show Details.  This will open a full description for the asset so you can verify the information that you entered. 

[Karebear]

Thank you! Now I have another question regarding this topic...

Can I include these as a Section 179 deduction? It gave me the option and I chose partial then deducted $1000 for each. Can I do that?

[VictorW9]

I don't believe it meets the qualifications for section 179 real property. Depending on what business activity you are engaged in, it may qualify as storage facility. Storage facilities used in connection with distributing petroleum or any other primary products of petroleum will qualify for section 179. 

[Karebear]

That's interesting... I didn't list it as real property and it still asked about the 179 deduction. I think because we spent over $2500 for the shed, it considers it an asset. The driveway too. I'll have to check that when I review my forms. When I talked to my CPA friend and asked if I could do that, she gave me a thumbs up, so now I'm a little confused.