We built a modular building that was completed in Dec but was not placed into service until Jan. Can we still use Section 179? Which yr would we claim it? Dec or Jan?

[Critter]

January

[TaxGuyBill]

Depending on exactly what "modular building" means, it might NOT qualify for section 179.

[kyndon16]

It’s a steel bolt together building.

[TaxGuyBill]

Is it more like a shed, or more like a full building with a foundation, electricity, etc.?

[kyndon16]

More like a shed but does have electricity

[TaxGuyBill]

Sheds can be a gray area, but from what I can tell, if it has a foundation (and is therefore attached to the land, rather than being movable), it is considered as "Real Property".  If that is the case, it is usually depreciated over 39 years and does NOT qualify for Section 179.

If it is movable (not attached to the land), the it is "Personal Property", which is often depreciated over 7 years, and DOES qualify for Section 179 (or better yet, the 100% Bonus Depreciation that is available).

[kyndon16]

It is moveable. So just to clarify it the depreciation would be used for January correct?

[TaxGuyBill]

Yes, January.

[kyndon16]

Thank you very much for your help. Really appreciate it.