Remodeling and architect fees current expenses?

[cathe]

I have a client who has always had daycare in her home. Last year, she leased a building in town, hired an arcitect and remodeled the space for her business. Since she does not own the space, these are current year expenses, right? Just want to make sure I am not expensing something that should be capitalized.

Cathe

[Super Mom]

You will have to research this, but my initial though is capitalize as leasehold improvements

[cathe]

Looking at leashold improvements, I am seeing Section 179 if placed in service beginning in 2010 or 2011, or SL 15yr if placed in service between Oct 22,2004 and Jan 1, 2012.
This occured June 1, 2012. It doesn't fall in either catagory. Am I interpreting something wrong here?

Cathe

[mactoolsix]

AATRA 2012 extended the leasehold improvements

Looking at leashold improvements, I am seeing Section 179 if placed in service beginning in 2010 or 2011, or SL 15yr if placed in service between Oct 22,2004 and Jan 1, 2012.
This occured June 1, 2012. It doesn't fall in either catagory. Am I interpreting something wrong here?

Cathe

From the Spidell AATRA update:

IRC §179 on qualified real estate
The Act extends, for 2012 and 2013, the provision that allows up to $250,000 of IRC §179 on
qualified real estate, including:
• Qualified leasehold improvement property as defined under IRC §168(e)(6));

Mike

[taxea]

Seems to me it depends on whether these are repairs meant to keep the location in the condition it was when first leased or whether these are improvements of the original status of the area. Just because the TP doesn't own the building doesn't mean the "remodel" isn't handled the same way as a business property owner would have to do it.