Daughter is living with her mother. Mother owns the property. Daughter decided to open a horse breeding and training business on mother's property. Built a barn and fence. Can daughter take the depreciation on the improvements even though she is not the owner of the property?
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Impaired Title
I dont see how unless some document can show title to the land is impaired by virtue of respecting the fence, barn, etc. There is nothing to tie ownership to allow depreciation.
Having said that, the most obvious such agreement would be a rental or lease. That way the fence, barn, etc. could be depreciated as leasehold improvements. Additionally, most leasehold improvements are depreciable over the life of the lease, instead of the long lives prescribed under MACRS and alternate methods. I don't know whether the taxpayer can benefit from the shorter lives, however, if the lease is with a related party.
Can't guarantee 100% of what I've said is true Nora, but maybe I've got you on the right path and others will chime in.
Golden Rocket
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