Good Afternoon Lilspunk,
You will need to keep track of all the expenses while you are building the shop. Once the construction is complete and you place the building in service, you will then capitalize the total expenses and then depreciate it over time. Your TurboTax software will all the calculations. For example, let's say, you started the construction in October 2023 and it was completed and placed in service as of July 1st, 2024. So when you are working on your 2024 tax return, you will enter this asset as placed in service date and capitalize the total amount you spent in the purchase of land and construction in your Schedule C, Asset section.
Thanks for participating in TurboTax's Ask the Expert event today. I hope this information was helpful!
Have an amazing day.
Amita R (CPA 10+ years)
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