Hello, I was curious if I am correct and missing anything? - The tax situations of the following for both residential and commercial property improvements: 1. Landlord makes/pays for improvements and is reimbursed by the tenant as a substitute for rent - Rental income and depreciation for the Landlord in both commercial and residential scenarios. 2. Landlord provides a cash allowance to the tenant to make improvements - Rental Income and depreciation to Tenant if commercial. Just Rental Income to Tenant if residential. Landlord amortizes as a lease acquisition cost in both residential and commercial scenarios. 3. Tenant makes/pays for improvements and agrees to have their rent reduced - The difference in reduction of rent from original amount is Rental Income to the Landlord in both commercial vs residential scenarios. No depreciation for Landlord. 4 - Tenant moves out after improvements/lease ends - Unless improvements were tenant-specific (in that case they would be forced to be fully depreciated/written off), any improvements on the Landlords books would be kept to depreciate in both commercial vs residential scenarios. Responses greatly appreciated. Thank you
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Hi, I purchased computer parts to build and use in my business. Can I expense the parts as I purchase them or would I have to capitalize and depreciate each computer built with the total cost being the parts? Thank you.
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