Hello,
In my Rental Home for my LLC I had to replace the Furnace and the entire HVAC system (except for the A/C unit). The Total Cost including Labor was $6200. The receipt does not split the cost by labor. Can I separate the cost into Fixed Asset (For depreciation purposes) and Labor (to expense immediately) somehow? I was thinking about 3100 evenly, (although even 3100 may be a little more than the Fixed Asset is actually worth when googling what they sell at for online).
The basis for depreciation in this instance is going to include delivery charges, sales tax, and installation costs.
See https://www.irs.gov/publications/p946#en_US_2022_publink1000107366
The basis for depreciation in this instance is going to include delivery charges, sales tax, and installation costs.
See https://www.irs.gov/publications/p946#en_US_2022_publink1000107366
No, you can't just arbitrarily split things up if they're not itemized out on the receipt or invoice. Either the contractor needs to provide you an itemized invoice/receipt, or your total cost of the asset is $6200.