Purchase of....

[Unregistered]

Client bought commercial property - gas station: Building, Land, equip and business.

Just want to make sure as this is my first gas staion return:

(1) Settlement charges on closing statement - NOT DEDUCTIBEL - ADD to Building Basis

(2) Equipment - $100,000 - No breakdown available - Depretiate over 7 years.

(3) Building - Dep over 39 years

(4) County taxes unpaid by Seller - From Jan to Oct (Purchase date Oct). Buyer got the credit for it. No impact? Record and deduct when paid by buyer next year?

Thanks!

[Unregistered]

Client bought commercial property - gas station: Building, Land, equip and business.

Just want to make sure as this is my first gas staion return:

(1) Settlement charges on closing statement - NOT DEDUCTIBEL - ADD to Building Basis

(2) Equipment - $100,000 - No breakdown available - Depretiate over 7 years.

(3) Building - Dep over 39 years

(4) County taxes unpaid by Seller - From Jan to Oct (Purchase date Oct). Buyer got the credit for it. No impact? Record and deduct when paid by buyer next year?

Thanks!

I think you need to to terat gas pumps as 15 years

[Unregistered]

Do you have 8594 that allocates purchases?

[jainen]

separate assets

You must depreciate equipment as separate assets. Surely he didn't spend all that money without figuring out what everything is worth? Assuming a liability (unpaid taxes) reduces the basis of the asset on which the tax is assessed.

[Unregistered]

What about closing cost? Should I add ALL closing costs to building?

Thanks!

[abby]

The closing costs and other matters

The closing costs should be added to the basis of all the assets purchased at closing using some reasonable method - percentage of total cost and/or property tax reports, for example - some of it will be added to the land and thus will not be depreciated

If there is a loan, the loan costs can be amortized over the life of the loan.

If the buyer pays a cost for the seller, I would consider that an additional closing cost - at least that's how we treat it with real estate purchases - it might reduce the seller's basis, but not the buyer's. There may be a rule with the purchase of a business that I don't know about, however.