Category Archives: Depreciation

Renting Bounce Castles

Today TaxMama hears from Shaunna in Washington State, who tells us. “I own a small rental business. Is the bounce castle I rent out considered an asset or inventory?”

Franchise Costs

Today TaxMama hears from Bill in North Carolina, with this question. “What is the tax treatment of equipment that is included in the payment of franchise fee? Is it all considered amortizable start-up cost? Or is the equipment depreciated separately starting with the day it opens for business? I am concerned about local business property […]

Depreciation Catch Up

Today TaxMama hears from Betty in Arizona, with this question. “ I realized that I didn’t deduct depreciation at all in my past 8 years tax returns. So I will use Form 3115 to capture all the depreciation. But this will create a big loss on Schedule E. Is this loss limited by Form 8582 […]

Leasehold Improvements

Today TaxMama hears from David in New York with this sensible question. “I have leasehold improvements in a warehouse I rent. The lease is five years. May I depreciate the leasehold improvements over the life of the lease, or five years? Next year, may I depreciate the improvements over the remaining life, or four years?”

Land vs Building

Today TaxMama hears from Tom in Pasadena, CA who tells us, “I am a hair stylist and I am going to start working exclusively out of my home. I will have 2 rooms of my townhouse used solely for business. When I take the depreciation for the business use of my home do I need […]

Rental Property

Today TaxMama hears from Sue in Nevada with a couple of questions. “I inherited rental property and must prepare for the 2008 tax return. Do I use fair market value as the cost basis in figuring the depreciation? Also, how do I calculate depreciation?”

HOA Income

Today TaxMama hears from Jan in Washington State who tells us. “I am on the board of a Homeowners Association. We take in about $20,000 and our expenses are $14,000 leaving $6,000 to go for future road maintenance. We also earn about $1,500 in interest. Can we deduct depreciation for our gate and camera (assets) […]

Selling Building

Today TaxMama hears from Oscar in Michigan who says, “I have a friend who wants to sell a commercial building that has been fully depreciated. She and her husband were co-owners of the building. Her husband died in 2001 when the building was appraised at $400,000.00. She is of the opinion that the appraised value […]

Writing off Software

Today TaxMama hears from Rodney in Texas who asks. “How do you determine the difference between a deduction that you can take in full in the year of purchase vs the deduction that is spread over many years? I am trying to relate this to software because some software is used without changing for many […]

Tooling Around

Today TaxMama hears from Mario in New York, who wants to know. “How do I deduct employee expenses such as expensive tools? IRS says for items lasting over a year, they should be depreciated. It looks like forms 4562 and 2106 carrying over to Schedule A should be used, but the tools are not listed […]