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Level 4
December 18, 2021
Solved

Depreciation Category Code for Leasehold Improvements

  • December 18, 2021
  • 2 replies
  • 14 views

Preparing a late 2018 tax return for a client.  They leased a building and spent $60k in leasehold improvements (not expanding the size or changing the interior structure of the premises).  I'm not sure which category code to use in Lacerte in the Depreciation screen.  Would it be a category 5 (Improvements), or should I use category 8 (Amortization)?

Thanks in advance for any advice!

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Best answer by TaxGuyBill

The "Qualified Improvement Property" is depreciated, not amortized.  So I suspect that #5 is probably the correct answer (however, I don't use Lacerte, so I'm not quite sure what it take you from there).

2 replies

Level 15
December 18, 2021

The "Qualified Improvement Property" is depreciated, not amortized.  So I suspect that #5 is probably the correct answer (however, I don't use Lacerte, so I'm not quite sure what it take you from there).

mhkdgalAuthor
Level 4
December 20, 2021

That makes sense - thank you!

 

joshuabarksatlcs
Level 9
December 19, 2021

5

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IRonMaN
Level 15
December 19, 2021

Are you sure about that answer?  I don’t mean the answer is wrong but it seems like an awfully short answer from you😜

Slava Ukraini!
joshuabarksatlcs
Level 9
December 19, 2021

still learning from @sjrcpa 

I come here for kudos and IRonMaN's jokes.