Self employed buying a office shed, is it tax deductible?

[tigerdx]

Hello everyone, I was thinking buying a office shed for business, can i write it off in tax? Thanks

[Mike9241]

yes it is. just a question of how?

I can't give a specific $ amount but if it is relatively inexpensive I would expense it. if not, then the question becomes is the shed a structure or a building?

If the shed is a structure that is not permanent in nature then you can use the 179 or bonus depreciation deduction for personal property to expense the entire cost the year acquired. 

If it's a building then it is real property depreciable over 39 years 

[tigerdx]

Hello Mike, it is about 12x12 and the price is around 10k

[Carl]

If it qualifies for a SEC179, then it's only worthwhile to expense it, if you actually have $10K of taxable business income to offset in the tax year you purchase it.

Most portable sheds, such as the one seen here at https://www.shedliquidators.com/products/10x12-Gable-Shed.html?keyword=&matchtype=&creative=31507156... may qualify to be expensed, or depreciated under SEC179.

But if you're looking at a $10K shed that sounds more like something that would become a permanent structure to me. The easy way to tell (at least in my county) is that if the shed increases your property taxes, then it's probably considered a permanent structure and would have to be depreciated over time.

[Trazon317]

Hi, Mike

We bought the Shed in 2021 but we are still struggling with the City to get a permit to do the platform where it will be assembled. Can we deduct in 2021 even though it is not yet assembled and used? In the meantime, I am using my Dining Room to set up my Drum Set and teaching via Zoom in 2021 while waiting for the permit. If I cannot deduct in 2021, can I deduct it in 2022 after we get the permit? Thank you.

[ColeenD3]

No, you can't claim it in 2021, since it has yet to be placed in service. When it is available for you to use as an office, you can begin to depreciate it.