Building Expansion

[dms5011]

We expanded our existing Retail Store (purchased in 2015) by 4000 square feet  - Not sure how to record would I list as a Qualified Improvement and take the Section 179 Deduction? Thank you

[ColeenD3]

You can't.

(6)Qualified improvement property

(A)In general

The term “qualified improvement property” means any improvement made by the taxpayer to an interior portion of a building which is nonresidential real property if such improvement is placed in service after the date such building was first placed in service.

(B)Certain improvements not included

Such term shall not include any improvement for which the expenditure is attributable to—

(i)

the enlargement of the building,

(ii)

any elevator or escalator, or

(iii)

the internal structural framework of the building.

Section 179

[dms5011]

So I need to add the cost of the expansion to the historical cost of the building?

[ColeenD3]

You need to create an improvement to the building as a new asset and start depreciating it over its useful life.