Improvement - wiring

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  • taxgirl
    Member
    • Nov 2013
    • 95

    #1

    Improvement - wiring

    I want to make sure I understand correctly...

    My client spent $2600 in updating wiring. If we "elect" the small taxpayer safe harbor, we can expense the improvements vs. capitalizing?

    He qualifies as small w receipts of less than $10 million
    The building has an unadjusted basis of less than $1 million
  • TaxGuyBill
    Senior Member
    • Oct 2013
    • 2322

    #2
    Yes.

    Just be sure that the TOTAL of all the repairs, maintenance and improvements are less than the smaller of (1) 2% of unadjusted basis or (2) $10,000). If the TOTAL is more than that, the taxpayer does not qualify.

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    • taxgirl
      Member
      • Nov 2013
      • 95

      #3
      I use proseries software and am wondering how to enter the expenses. Do I just enter them as expenses with the "election" or enter the improvements as an asset and depreciate and 179 the amounts?? (also with the election)

      Comment

      • TaxGuyBill
        Senior Member
        • Oct 2013
        • 2322

        #4
        Don't enter it as an asset. The election is to treat that cost as a deductible expenses, so just enter it as an expenses (and fill out the election). Personally, I enter it as an "other" expense and name it "Safe Harbor for Small Taxpayers", but you technically can lump it with any other category of expense.

        Comment

        • taxgirl
          Member
          • Nov 2013
          • 95

          #5
          Thank you for your comments

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