Establish Business Move to a New Place

[Foxy-Lady]

Have an established retail business that moved into a shopping mall. The spot required costs to establish the retail business.  This included electrical, painting, new flooring, shelving materials, hooks to hold merchandise, legal, traveling to purchase various items, janitorial supplies, signage and misc.  Total for all of the above was $14,991.  This is a Schedule C - LLC.  How do you show this on the books/taxes?

[abctax55]

Some would be expenses (especially the diminimis stuff).

Some would be LHI and depreciated over 39 years/or maybe some over 15 years.

Some are just supplies.

[qbteachmt]

Improvements (asset): Electrical and painting can't be taken with them if they leave. Furniture and Fixtures (asset): Shelving is theirs. Supplies: Janitors will need that again and again.

You need it all categorized. And make sure the landlord isn't giving consideration back; that often happens with a new tenant improvements.

[Foxy-Lady]

LHI would be:

1. Painting
2. Electrical (boxes, switch plates, receptacles, light switches) 
3. Flooring, molding, trim
4. Supplies required for the above
5. Exit signs and emergency lights
6. Slatwall panels and dividers
7. Area Rug
8. Signage
9. Legal

Remainder would be the various expenses/supplies 

Since it's a 5 year lease and not owned would you still do 15 years?

[BobKamman]

There's some stuff about Qualified Improvement Property and bonus depreciation for 60% of it in 2024 that I don't really understand, but if that were my client I would be looking up.  

[abctax55]

The term of the lease is irrelevant.

Slatwall panels & dividers sound "movable" as you can take it with you when you leave.

Area rug.... as you can roll it up & walk out the door with it?

Signage... that you could also take with you upon lease end, probably, unless it specifies the exact location?  

Legal - for drafting the lease?

And pay attention to what @BobKamman mentions too