Mike, thanks for your reply. I was out of town until last night, so could not reply right away.
When you say it depends if it is used for business, do you mean if some land improvements are deductible when they are 100% for a business and irrelevant to the HO?
The IRS website clearly stated the HO basis is the total FMV of the house and all structures, including garages but not land, multiplied by the percentage of the square footage of the office vs the entire house, to be depreciated over 39 years.
With that instruction, I assumed anything remaining if a fire burned everything to the ground, would be classified as land and not depreciated. So, I included everything in or on the ground that would be left, as land assets. I figured those things create a "developed lot" (septic, driveway, culvert, pads, underground conduit & wiring). I then read IRS category definitions that allowed such land improvements to be depreciated for businesses that improved and sold lots, and for big companies putting in parking lots for their offices and factories.
Then I read elsewhere on the Internet that HO land improvements with a life expectancy (sidewalks, septic, driveways, some landscaping) can be depreciated, making me question my entire basis division between home and land. Pretty much everything outside was completed before the house was completed prior to moving in; and we started using the HO 2 weeks later, but the drainage issues, grass and sidewalks were months later.
In TurboTax do I use the HO Improvements Asset Worksheet for the sidewalk and include it all as Land, leave out the Land entry; or, do I use the basic Asset Worksheet, and if so, which asset category do I choose?
I just want to make sure I do it right since this is the first year.
