sect 179 - septic system

[oceanlovin'ea]

Client has a barber shop/ beauty salon attached to his home. In 2006 he had to put in a new septic system. The tank was okay but he had to put in new drain lines and install a special something (sorry can't remember wha he called it) and a pump which cost him about $6700.

I think that is too much to call a repair, isn't it?

So I was trying to figure out if that is eligile for section 179 or if it must be depreciated and for how long?

It is not really land improvements. I looked in the depreciation book at the list of eligible properties and it does mention was and sewage disposal services. Would this apply?

Thanks for your help.

Linda F

[ChEAr$]

section 179

is for personal property and this isn't.

So I would go with land improvements and 15 years amortized.

[cpadan]

$6,700 sounds high for repairs.

Asset class 00.3. Land Improvements: includes sewers (but not municipal) drainage facilities ect. ..15 year property. That is where I put septic systems, I haven't had one with a pump.

Then pump might be personal property (section 1245) eligible for section 179 election (gas station pumps qualify) so it might depend on how it was set up.

You mentioned shop was attached to house, so you also have personal use issues attached.

Dan

[oceanlovin'ea]

60% Business

The business pecentage is 60% for mortgage interest, taxes, any expenses that involve the whole property.

They are at the edge of something environmental and SWIFTMUD got involved and made them put in some kind of special drainage system and pump to make sure that the water sources in the area are not damaged by pollutants going down the drain.

I felt like the price was too high to just call it repairs, although the tank is still in place and they replaced drain field lines and then had to put in this extra equipment to pass inspections.

I had started out using 15 years for length but wanted to see if anyone thought it qualified for section 179. Client thought since he had spent so much money he wouldn't owe IRS this year and he owes around $400. His wife said that is not much it is okay. He was depressed. So I told him I would check it out to make sure.

He's happy for this year. I told him to hire his kids. They already work around the shop so pay them through business. He was soooo happy.

Thanks

Linda F