Driveway, roadway to walkout basement

[DMFN]

I operate a business in my walkout basement.  Presently, I am unable to access the area for loading/unloading if weather conditions are poor.  I plan to add a roadway around the side of the house to the back doors.  I have a large existing driveway for parking vehicles in the front of the house, but it does not allow me to take trucks to the back to load/unload.  I may also park trailers and equipment owned by the business when the roadway isn’t needed.  Am I able to deduct this?

[tagteam]

Probably depreciable as a land improvement but perhaps the cost may need to allocated between the increase in value to the property held for personal use and business use.

I'll page @AmeliesUncle 

[AmeliesUncle]

I agree that it would be depreciated as a land improvement.

If it isn't used for any personal purposes, I would claim it as 100% business.  If it used for any personal purposes (for example, parking personal vehicles or partly personal vehicles on it), you would need to determine a business percentage for the roadway.

[DMFN]

Thank you.  I was considering that the first 38 ft may end up being used as parking for a mixed use vehicle.  It would be difficult for anyone to think the rest of it would have any personal value. 

[Opus 17]

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@DMFN wrote:

Thank you.  I was considering that the first 38 ft may end up being used as parking for a mixed use vehicle.  It would be difficult for anyone to think the rest of it would have any personal value. 

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Be aware that business improvements are depreciated over 39 years and must be repaid (recaptured) when you sell the property.  However, the current tax deduction is usually considered more valuable than the future payback, due to the effects of inflation. 

[tagteam]

I'm not sure why this land improvement couldn't use a cost recovery period of 15 years or even bonus depreciation.

See https://www.irs.gov/publications/p946#en_US_2022_publink1000107513

I'll page @AmeliesUncle again.

[Opus 17]

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@tagteam wrote:

I'm not sure why this land improvement couldn't use a cost recovery period of 15 years or even bonus depreciation.

See https://www.irs.gov/publications/p946#en_US_2022_publink1000107513

I'll page @AmeliesUncle again.

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I think you are right, appendix B includes both "sidewalks" and "roads" as 15 years.