Building deduction

Forum|Forum|4 years ago
April 13, 2022
1 reply
12 views

Last year I put up a new building. 40% of the building is used for agricultural activity, 30% is used for storage related to my wife's business, and the remaining 30% is just for personal use. My general thought was 40% would go on schedule F, 30% on schedule C, and of course the 30% for personal use would have no deduction. If this is correct, how do I make it work and get the information in the correct forms in TurboTax? I also believe, or was hoping, the 40% on schedule F for depreciation in deducted the first year using bonus depreciation and 30% on schedule C is just a square foot calculation against the total cost on a 39 year depreciation. Please advise thanks..

ColeenD3

Level 15

No, there is no Section 179 for a partial use building. You can depreciate each 40 and 30% over 39 years.

When it comes to single-purpose agricultural structures (SPAS), you would generally qualify for:

a Section 179 deduction of up to $500,000 in 2010 and 2011;
bonus depreciation on the remainder of the cost (for new construction in 2010); and
the net remaining amount being depreciated over 10 years, not 20 years

SPAS are defined as single-purpose livestock structures or single-purpose horticultural structures.

gletvinAuthor

Level 2

Thanks Coleen. So, for a SPAS built in 2021, can I depreciate 100% of cost in building on 2021 return?

AmyC

Level 15

If it was a single purpose, you could. However, your building is multi- purpose so you can't. You need to depreciate it as Coleen said above- each part is depreciated on its return.

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