topic Depreciation on a Parade Float in Get your taxes done using TurboTax

Depreciation on a Parade Float

joey126 — Tue, 24 Feb 2026 06:41:45 GMT

I just took over as the Treasurer of a non-profit. They have a float that is used in parades. They originally paid 1400 for the trailer it on. A lot of money has gone into wood, decorations, etc. It seems really to be a work in progress. Stage One was built in December 2021, however the nonprofit did not begin until February 2022. Embellishments were in 2022 and again in 2023. They Board estimates there is about a total investment of 5500. Hard to say how long it will last... It's made of wood and needs constant improvements. Any suggestions? Should it be depreciated? Should it be expensed as embellishments are made? If it should be depreciated what do we estimate the useful life would be? Thanks for any help you can offer.

Re: Depreciation on a Parade Float

NCperson — Mon, 26 Jun 2023 17:42:27 GMT

@joey126 - why does it matter? as a non-profit, there is no tax to be paid in event, right?

Re: Depreciation on a Parade Float

joey126 — Mon, 26 Jun 2023 18:51:02 GMT

Good point.. Just trying to make sure I do everything correctly since non-profits do capitalize assets

Re: Depreciation on a Parade Float

Opus 17 — Mon, 26 Jun 2023 19:44:50 GMT

I think there could be reasons to do accurate cost basis tracking for assets as part of a nonprofit's taxes.

Starting with the float being "placed in service" with the non-profit in December 2022, you would use the cost basis or the fair market value at the time, whichever is less.

Leaving that aside for a bit, are you sure the "embellishments" would be "improvements" which add to the cost basis and are depreciated, or should they really be considered repairs or maintenance, which are expenses. Even if they are "improvements" for the cost basis, I believe there is a safe harbor that would allow you to expense any improvements less than $2500 per year. I would do that, if available.

That just leaves you with the float. I can't imagine a useful life more than a few years, given weather, deterioration during storage, and changing sentiments on design and style that would probably mean it has to be redesigned every few years anyway. In fact, I would be inclined to list only the trailer as an asset, and list the building, repairing and enhancements of the float structure as expenses. After all, the fair market value of a parade float for a specific organization is likely to be zero for anyone else. Only the trailer itself is likely to have value for an unrelated buyer.

Re: Depreciation on a Parade Float

joey126 — Tue, 11 Jul 2023 19:02:10 GMT

Opus 17,

Thank you for your answer. I am going to go the route you suggested.