business storage bldg on resi prop

[taxea]

I'm stumped! I checked everywhere that I could think of to find the class for a storage building improvements for the TP's business that is on the TP's personal residence property. I do an 8829 because the office for the business is in his home. The business is a storefront that does not have sufficient storage for his inventory and no office space.
Can anyone help?

[Koss]

Storage Building

You're not depreciating the land; you're only depreciating the building.

So what difference does it make where the building is located?

What matters is how the building is used.

It's nonresidential real property. Isn't that 39 years?

What am I missing here?

BMK

[KathMorgan]

Separate Building?

Is the storage building a separate structure from the home? If so, the location shouldn't matter. Treat it as depreciable 39 year property straight on the Schedule, not on the Home office form. If it is connected to the house, add the square footage to the office and the home totals to get the percentages and then take the improvements made specifically to the storage building as direct expenses or add the basis to the home and depreciate it out with the home. I suggest option number 1 if at all possible.

Kathy

[taxea]

You're not depreciating the land; you're only depreciating the building.

So what difference does it make where the building is located?

What matters is how the building is used.

It's nonresidential real property. Isn't that 39 years?

What am I missing here?

BMK

and Cathy...I know it is 39 years and it isn't attached to the home so it doesn't go on the 8829 but I couldn't find a depreciation code for it. I didn't see one for nonresidential real property so I guess I will just enter all the depreciation manually.

[Burke]

There's gotta be a code for that somewhere in the software. How would you depreciate an office bldg? Or the OIH part of the home?

[Gretel]

and Cathy...I know it is 39 years and it isn't attached to the home so it doesn't go on the 8829 but I couldn't find a depreciation code for it. I didn't see one for nonresidential real property so I guess I will just enter all the depreciation manually.

It's code J1 in ProSeries.

[KathMorgan]

Codes

Not sure what software you are using, but I would put it in as a component of non-residential real, 39yr MM.

Kathy

[taxea]

There's gotta be a code for that somewhere in the software. How would you depreciate an office bldg? Or the OIH part of the home?

Sorry I finally found it....I kept seeing residential rental only....Portagee moment!

[Jiggers]

I'm stumped! I checked everywhere that I could think of to find the class for a storage building improvements for the TP's business that is on the TP's personal residence property. I do an 8829 because the office for the business is in his home. The business is a storefront that does not have sufficient storage for his inventory and no office space.
Can anyone help?

Is this a portable storage building? Not on a cement slab?

How about Section 1245 Asset? 7 years depreciation.

See A C Monk & Co versus US.

If a 1245 asset, and not assigned to any specific year, then doesn't the code say 7 years by default.

I got my information from a 2007 Quickfinder Depreciation Handbook and from the IRS website on "Cost Segration".

[Gary2]

and Cathy...I know it is 39 years and it isn't attached to the home so it doesn't go on the 8829 but I couldn't find a depreciation code for it. I didn't see one for nonresidential real property so I guess I will just enter all the depreciation manually.

Even though it's not attached, it must still go on the 8829 unless it's on a separate parcel (with separate taxes and separate mortgage, if any). The "separate structure" rule is an alternative to the "principal place of business" and "place where you meet customer" requirements. Or, at least, the fact that the instructions for the 8829 mentions the separate structure rule without saying not to use the 8829 leads me to this conclusion.

If the business still shows a profit, it probably won't make a difference in the result. But if the business shows a loss, it will, because of the loss limits.