Leasehold Improvement (Class Life)?

[ILLMAS]

When are the cases when a leasehold improvement can be depreciated for a different class life then 39yrs? I have a client that has currency exchange and is very frugal when it comes to leases, he looks for spaces that would need the minimal improvements to open a currency exchange, plus he does not sign a long term lease. The leasehold improvements he makes does not change the structure of the building, the most common improvement is a wall to sepearate between the costumer and teller, they have many bullet proof glass and counters they resuse, so they spend very little on improving th space. In most cases, they leave the space back to it's original sate. When I mean they spend the minimal, they don't spend more the 10K a location. So I am just wondering if something different then 39yrs can be used for tax purposes?

Thanks

[kcjenkins]

If these are removable partitions, that they can and do take with them when they move, they are not 'leasehold improvements, IMHO, but 'Furniture or Fixtures', and would be depreciated as 7 year office furnishings.

[ILLMAS]

If these are removable partitions, that they can and do take with them when they move, they are not 'leasehold improvements, IMHO, but 'Furniture or Fixtures', and would be depreciated as 7 year office furnishings.

That is how we are looking at it, however the walls that are put in place are fixed, they are not movable once the client ends it's lease, they knock down the wall and they only take the doors and bullet proof glass and counter with them, they can reuse it, they would just have to make a wall to accomdate it at a new location.

[imjulier]

Based on what you are describing it sounds like 39 yr depreciation to me.

Julie

[RoyDaleOne]

Based on what you describe, it does not sound like a structural component of the building to me.

[PapaJoe]

Sounds to me like the counter, doors and bullet proof glass are personal property and the wall is a leasehold improvement with a 39 year life.

[RoyDaleOne]

http://www.irs.gov/businesses/article/0,,id=134671,00.html

What industry is the client?

[ILLMAS]

http://www.irs.gov/businesses/article/0,,id=134671,00.html

What industry is the client?

This client is in the money transmitting and currency exchange business, similiar to a western union type of business.

[RoyDaleOne]

See: Rev. Rul. 65-79

The property would be 5 year property if not a structural component.

You really need a copy of the "U. S. Master Depreciation Guide". Almost any year say after 2004 is good, because, very little changes year to year.

The "Guide" is a 1,000 plus tome covering most, but nor all aspects of depreciation. And, you think depreciation is straight forward.

I got my copy free from CCH.

[TAXBILLY]

The latest edition:

http://onlinestore.cch.com/productdetail.asp?productid=5241

taxbilly