tony-j
Level 1
12-07-2019
01:48 AM
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My client leased office space for his business in 2018 and paid $20,000 for the build out of the interior of the office.
The
landlord did not charge rent for the first 8 months of the lease term
as part of the negotiation for my client to pay for office build-out.
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TaxGuyBill
Level 15
12-07-2019
01:48 AM
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I suspect your term "build out" means it is either enlarging the building or involves the "internal structural framework of the building". If that is the case, that disqualifies it as a "Qualified Improvement Property" (which qualifies for Section 179).
https://www.law.cornell.edu/uscode/text/26/168#e_6
That leaves 39 years as the only option, even if Congress fixes the "Qualified Improvement Property" to 15 years.
https://www.law.cornell.edu/uscode/text/26/168#e_6
That leaves 39 years as the only option, even if Congress fixes the "Qualified Improvement Property" to 15 years.
tony-j
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12-07-2019
01:48 AM
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The unit was delivered to him with just studs. The $20,000 includes doors, trim, walls, paints, carpet. He seems to be convinced that this can be deducted 100% in 2018.
TaxGuyBill
Level 15
12-07-2019
01:48 AM
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It sounds like it qualifies for Section 179.
If it doesn't involve "enlargement" or the "internal structural framework of the building", then it would be a "Qualified Improvement Property" (code J5 on the ProSeries Asset Entry Worksheet), which qualifies for Section 179.
If it doesn't involve "enlargement" or the "internal structural framework of the building", then it would be a "Qualified Improvement Property" (code J5 on the ProSeries Asset Entry Worksheet), which qualifies for Section 179.
tony-j
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12-07-2019
01:48 AM
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From what I understand, the issue and questions with the Tax Cuts and Jobs Act is bonus depreciation, but Section 179 is still allowed for "Qualified Improvement Property"?
TaxGuyBill
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12-07-2019
01:48 AM
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As I said twice before, yes.
https://www.law.cornell.edu/uscode/text/26/179#e
https://www.law.cornell.edu/uscode/text/26/179#e
tony-j
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12-07-2019
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Thank you for your help.
Just-Lisa-Now-
Level 15
12-07-2019
01:48 AM
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Check one of the boxes in this window of the federal information worksheet, and then click the yellow question mark to see information about leasehold improvements. This should at least give you a starting point for research.
♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
