Topsoil in a Greenhouse & outdoor garden

[carolf]

Client built a greenhouse and outdoor garden and spent several thousand dollars on topsoil. I'm thinking I would capitalize the topsoil. Would it be considered a land improvement? 15 years?

[Corduroy Frog]

No Depreciation

Carol, it should be capitalized and I can't find where this can be depreciated at all.

The good news is all replacement soil expenditures in later years can be totally expensed, in my opinion.

[taxea]

Is this a business?

[Burke]

Client built a greenhouse and outdoor garden and spent several thousand dollars on topsoil. I'm thinking I would capitalize the topsoil. Would it be considered a land improvement? 15 years?

It sounds like a capitalized expense to me since it was simultaneous with a new greenhouse etc (which I assume is a business?) Soil remediation expenses to repair damaged soil would be treated as an expense like landscaping if done at a later time.

[carolf]

Yes, this is a business.

It looks like the consensus is that it can be capitalized but not depreciated because it is land.

BUT, in the future additions can be expensed.

Thanks for the input!

[TaxmannEA]

You need to know what the use of the soil is. If the greenhouse is putting the soil in pots or flats and using to grow plants which are then sold with the soil in the pot, it may be a material expense.