Question

How to depreciate labor costs to remodel a building for business

Forum|Forum|7 years ago
October 15, 2018
1 reply
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I am moving from my home office into a separate building on my property that we have been remodeling over the past year. I would like to depreciate the portion of the labor costs that were spent in 2017. I have chosen the category of "Amortizable Intangibles", then section 195 - Business Startup costs, and then 27.5 years Recovery Period. I am just not sure this is correct, and cannot seem to find the answer anywhere, including through the IRS Website as well as trying to call them, which twice was unsuccessful. Does anyone have information about this situation? I can't believe it's that uncommon, as businesses are always relocating and renovating. Any assistance is appreciated.

S

suzyquzy

You don't depreciate labor per se. All the costs incurred to construct/remodel the separate building get added together - labor, supplies, permits, fees, etc. When the project is "placed in service" you depreciate that total cost, using MACRS 39 years.