Hello,
I purchased a metal building for my small business and paid a deposit in November 2023. The full price of the building was not paid until delivered in March 2024. How would I claim the deposit ($3000) for my 2023 taxes, or would I just claim the entire cost of the building in my 2024 taxes? The building is not in use yet and will be a separate structure on my residential property. In 2023, the business was more of a side hustle and will become more professional in 2024 (waiting on LLC paperwork). I appreciate any help or guidance. Thanks!
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You do not deduct the cost of a building. A building is a depreciable asset. So, when you start using it, you will start depreciating the building. You will include the $3,000 along with whatever more you paid this year as the purchase price part of the cost basis.
You will most likely capitalize and depreciate the building (or '179'expense the building in 2024 when it is place in service
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