“There are some new remodel and refresh regulations (Rev. Proc. 2015-56). Do you have any suggestions on how Bassets could handle the depreciation. Remodels and refreshes would be allowed to expense 75% of the Lease Hold Improvement in the first period and the remaining 25% would be allowed bonus depreciation. “
Here is our reply:
Yes, we added a new ITC code “C” for Capitalization Rules. Here is a sample LHI (Lease Hold Improvement) calculation example with the new code:
- Cost $1,000.00
- 75% of $1,000.00 asset cost can be expensed at $750.00
- 25% of $1,000.00 asset cost can be depreciated @ $250.00
- Qualified LHI w/ 50% bonus depreciation @ $125.00
- Qualified LHI w/ Straight Line, Full Month 1st Year Convention over 15 years
T1 Tax Report Columns:
- Purchase Price = $1,000.00
- Section 179 = $0.00
- ITC Amount = $750.00
- Bonus Depreciation = $125.00
- Depreciable Basis = $125.00
- Prior, Current Period, Total Accum and Net Book Value reflect current period depreciation during the life of the asset
The start or effective date for this new feature applies to assets acquired after 01/01/2015. For more information, see this post “Majority of Costs to Remodel or Refresh Retail Stores Are Deductible Under New Safe Harbor” from TheTaxAdvisor.com.
Questions? Comments? Let us know in the comments section below.
More information about Bassets eDepreciation software can be found at Bassets.net or depre123.com. At Bassets register for our live webinar, download a free evaluation copy and get a personalized pricing estimate. At depre123 try out our Free Depreciation Calculator and check out our cloud based fixed assets application.