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Level 4

Question

Prepaid for Fixed assets

5 replies
42 views

Scorp - 1120S

I paid for fixed assets in 2023 but the equipment will not arrive and be installed until 2024. How should I show the transaction on my 2023 return? I put it as prepaid expenses.

TurboTax Business Windows

CountingcatAuthor

Level 4

Forgot to mention, it is cash accounting.

Alumni - Intuit

Yes.

Fixed assets can only be depreciated when placed in service, i.e. in 2024.

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CountingcatAuthor

Level 4

OK. But what do I do with the expense on this year's return. Is it considered a prepaid asset so that it shows up in the asset portion of the balance sheet in books and on the return? Or should it be somewhere else?