My husband races professionally. We purchased a piece of property for him to train and build obstacles on - can we count the property purchase as a business expense?

[ToddL · Accepted solution]

Real property cannot be expensed (or depreciated) for business purposes. Real property doesn't deteriorate or get "used up" (see the definition of expense at bottom).

The cost of improvements you make for the purpose of him training could be depreciated. Examples would include safety fencing, garage structure, obstacles, and the like.

An expense is the reduction in value of an asset as it is used to generate revenue. If the underlying asset is to be used over a long period of time, the expense takes the form of depreciation, and is charged ratably over the useful life of the asset. If the expense is for an immediately consumed item, such as a salary, then it is usually charged to expense as incurred.