Depreciation Category Code for Leasehold Improvements

[mhkdgal]

Preparing a late 2018 tax return for a client.  They leased a building and spent $60k in leasehold improvements (not expanding the size or changing the interior structure of the premises).  I'm not sure which category code to use in Lacerte in the Depreciation screen.  Would it be a category 5 (Improvements), or should I use category 8 (Amortization)?

Thanks in advance for any advice!

[TaxGuyBill · Accepted solution]

The "Qualified Improvement Property" is depreciated, not amortized.  So I suspect that #5 is probably the correct answer (however, I don't use Lacerte, so I'm not quite sure what it take you from there).

[joshuabarksatlcs]

5

[IRonMaN]

Are you sure about that answer?  I don’t mean the answer is wrong but it seems like an awfully short answer from you😜

[joshuabarksatlcs]

still learning from @sjrcpa 

[mhkdgal]

That makes sense - thank you!

[sjrcpa]

You're a quick study.