Yardley CPA Posted February 10, 2023 Report Posted February 10, 2023 Please confirm (or correct me) my understanding of leasehold improvements. Homeowner has a barn on her property and plans to make improvements to barn to begin a small business. The plan is for the individual to form a Single Member LLC - Schedule C. After improvements are made to the barn she will start to conduct business within it. Am I correct that the improvements made to the barn increase it's basis and are not generally deductible as expense? I recognize this post is very basic in nature and not providing detailed information on the business or the types of improvements. For the time being, that's all the information I have and I will update as I learn more. With that said, generally speaking is my understanding correct? Improvements will add to basis of the barn and are not deductible until the business begins? 1 Quote
Abby Normal Posted February 10, 2023 Report Posted February 10, 2023 If they are repairs in nature, they could be considered start up costs. If capital, then depreciation starts when the business is operating. 3 1 Quote
TAXMAN Posted February 10, 2023 Report Posted February 10, 2023 I would also look at repairs to become start up and rest as capital. Only you will know once you see the numbers. 1 Quote
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