Q. How should I report this case?
A. You start depreciation in 2023, the year the improvement was placed in service.
Q. Should the city permit fees also go into the capital improvement and be depreciate in 27.5 years?
A. Yes.
Q. Should we count all expenses related to this project as capital improvement in the tax year 2023 (even though some of them occurred in 2021 and 2022) since the project was not put in service prior to that?
A. Yes
