Leaseholder cost

[TAXMAN]

I have a TP who moved her Ice cream stand from one location to another. The new location required Excavation $1300, Plumbing ($2000) Electrical work($1346). I think the Excavation becomes land improvement and the other 2 would become leasehold improvements? What dep rate would you use?

[Possi]

I found this, which I read as only landscaping for depreciation. You can tell if it was for landscaping or not:

 

https://taxmap.irs.gov/taxmap/pubs/p946-002.htm

Land(p6)

Land

You cannot depreciate the cost of land because land does not wear out, become obsolete, or get used up. The cost of land generally includes the cost of clearing, grading, planting, and landscaping.

Although you cannot depreciate land, you can depreciate certain land preparation costs, such as landscaping costs, incurred in preparing land for business use. These costs must be so closely associated with other depreciable property that you can determine a life for them along with the life of the associated property.

 

The leasehold would be 39 years, of course. 

[Lee B]

The classification of the excavation costs depends on the functional intent and usage.

If the excavation was required to provide a sound footing for the Ice Cream Stand and to bring in the plumbing and electrical then it's clearly part of leasehold improvements.