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New shop build - can it be deducted?

Discussion in 'Business Operations' started by queen of spades, Mar 12, 2011.

  1. queen of spades

    queen of spades LawnSite Member
    Posts: 217

    I built a new shop for my business (LLC) last year. Should I consider including as a deduction on my taxes?
     
  2. queen of spades

    queen of spades LawnSite Member
    Posts: 217

    I'm only "dumbfounded" by the tone of your reply.

    I planned to check in with a local tax guy next week, but was interested to see what others thought. We are allowed to deduct utilities, rental costs, gas to jobs, and equipment among other things. If I use the shop for my business, why not. What is the difference between a shop and a new $40k piece of equipment? Both are used for the business.

    Hardly a stupid question. Only stupid people wouldn't want to save money and reduce taxes paid.
     
  3. SDelPrete

    SDelPrete LawnSite Member
    Posts: 74

    yes you should deduct the cost of building it
     
  4. JFGauvreau

    JFGauvreau LawnSite Bronze Member
    Posts: 1,297

    Yes, is it after all your business HQ.
     
  5. nepatsfan

    nepatsfan LawnSite Gold Member
    Posts: 3,142

    The only thing that dumbfounds me is the fact that someone would ever think that it would for any reason not be tax deductable. You can deduct a room in your house as a home office. Why on earth would anyone think that a building built and dedicated for business would not be tax deductable.
     
  6. New2TheGreenIndustry

    New2TheGreenIndustry LawnSite Senior Member
    from GA
    Posts: 843

    I was asking my accountant about building a shop, and he thought that I should build it and rent it to the company.
     
  7. queen of spades

    queen of spades LawnSite Member
    Posts: 217

    Thanks all -- will confirm options with a tax person next week.
     
  8. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 857

    Not a tax person - commercial buildings (land excluded) are depreciated over 39 years using straight line depreciation.
     
  9. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 857

    Thought I would throw out a couple of pros and cons based on my experience.

    pros - Own an asset that hopefully appreciates. Can collect rental income that is not subject to SS/med taxes.

    cons - Own an asset that does not appreciate. Your company is the biggest or only tenant - if you go out of business you have lost that tenant.
     
  10. sure you can, but I wouldn't.
     

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