Level 4

Question

Establish Business Move to a New Place

Forum|Forum|1 year ago
February 1, 2025
3 replies
12 views

Have an established retail business that moved into a shopping mall. The spot required costs to establish the retail business. This included electrical, painting, new flooring, shelving materials, hooks to hold merchandise, legal, traveling to purchase various items, janitorial supplies, signage and misc. Total for all of the above was $14,991. This is a Schedule C - LLC. How do you show this on the books/taxes?

Business

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abctax55

Level 15

Some would be expenses (especially the diminimis stuff).

Some would be LHI and depreciated over 39 years/or maybe some over 15 years.

Some are just supplies.

HumanKind... Be Both

F

Foxy-LadyAuthor

Level 4

LHI would be:

Painting
Electrical (boxes, switch plates, receptacles, light switches)
Flooring, molding, trim
Supplies required for the above
Exit signs and emergency lights
Slatwall panels and dividers
Area Rug
Signage
Legal

Remainder would be the various expenses/supplies

Since it's a 5 year lease and not owned would you still do 15 years?

abctax55

Level 15

The term of the lease is irrelevant.

Slatwall panels & dividers sound "movable" as you can take it with you when you leave.

Area rug.... as you can roll it up & walk out the door with it?

Signage... that you could also take with you upon lease end, probably, unless it specifies the exact location?

Legal - for drafting the lease?

And pay attention to what @BobKamman mentions too

HumanKind... Be Both

qbteachmt

Level 15

Improvements (asset): Electrical and painting can't be taken with them if they leave. Furniture and Fixtures (asset): Shelving is theirs. Supplies: Janitors will need that again and again.

You need it all categorized. And make sure the landlord isn't giving consideration back; that often happens with a new tenant improvements.

Don't yell at us; we're volunteers

BobKamman

Level 15

There's some stuff about Qualified Improvement Property and bonus depreciation for 60% of it in 2024 that I don't really understand, but if that were my client I would be looking up.

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