That would be considered a business real property improvement.
The cost of an improvement to a business asset is normally a capital expense.
But you could make an election to deduct improvements all in 2017. This is called the Safe Harbor Election.
Here are the rules you need to meet to take this election:
- Your gross receipts, including all your other income, are $10,000,000 or less.
- Your eligible building has an unadjusted basis of $1,000,000 or less.
- The cost of all repairs, maintenance and improvements is less than or equal to the smallest of these limits:
- 2% of the unadjusted basis of your building or
- $10,000
Or, you can elect to deduct the costs of making a facility or public transportation vehicle more accessible to and usable by those who are disabled or elderly. You must own or lease the facility or vehicle for use in connection with your trade or business. See See Barrier
Removal Costs on page 25 of this link.
You may also be eligible for the Disabled Access Credit, which is part of the General Business Credit.
That would be considered a business real property improvement.
The cost of an improvement to a business asset is normally a capital expense.
But you could make an election to deduct improvements all in 2017. This is called the Safe Harbor Election.
Here are the rules you need to meet to take this election:
- Your gross receipts, including all your other income, are $10,000,000 or less.
- Your eligible building has an unadjusted basis of $1,000,000 or less.
- The cost of all repairs, maintenance and improvements is less than or equal to the smallest of these limits:
- 2% of the unadjusted basis of your building or
- $10,000
Or, you can elect to deduct the costs of making a facility or public transportation vehicle more accessible to and usable by those who are disabled or elderly. You must own or lease the facility or vehicle for use in connection with your trade or business. See See Barrier
Removal Costs on page 25 of this link.
You may also be eligible for the Disabled Access Credit, which is part of the General Business Credit.
My business is a retail nursery which I operate from the leased site of a former nursery. I am installing concrete pathways to improve access in the nursery grounds for handicapped, disabled or mobility impaired customers. (Its a nursery so customers will come solely to walk the nursery and enjoy the space). Formerly the main nursery grounds were gravel and not conducive to 'nature walks'. My lease had formerly been 3 year leases, which were renewed every 3 years. I am in my 10th year at this site and we have decided to forego formal lease agreements, so I am basically month to month.
My concrete paths cost about $1700 per path with a total cost of $8500 (No demolition required). I would like to expense as much as possible ($8500) and notice your safe harbor deduction for small business, as well as the expense allowance for handicap facilities. Can i expense all this year 2020 (project begun and completed December 7-Decmeber 10). Thanks
Yes, you would be able to claim 100% additional first year depreciation on the cost of these paths. The paving qualifies because it meets the qualification of having a recovery period of 20 years or less (paving as a depreciable life of 15 years). Even though it's short term, renting month to month still qualifies as a lease agreement.