Fixed Asset vs Labor

Forum|Forum|3 years ago
April 28, 2023
2 replies
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Hello,

In my Rental Home for my LLC I had to replace the Furnace and the entire HVAC system (except for the A/C unit). The Total Cost including Labor was $6200. The receipt does not split the cost by labor. Can I separate the cost into Fixed Asset (For depreciation purposes) and Labor (to expense immediately) somehow? I was thinking about 3100 evenly, (although even 3100 may be a little more than the Fixed Asset is actually worth when googling what they sell at for online).

TurboTax Business Windows

Best answer by Anonymous_

The basis for depreciation in this instance is going to include delivery charges, sales tax, and installation costs.

See https://www.irs.gov/publications/p946#en_US_2022_publink1000107366

Anonymous_Answer

Employee

The basis for depreciation in this instance is going to include delivery charges, sales tax, and installation costs.

See https://www.irs.gov/publications/p946#en_US_2022_publink1000107366

Carl11_2

Employee

No, you can't just arbitrarily split things up if they're not itemized out on the receipt or invoice. Either the contractor needs to provide you an itemized invoice/receipt, or your total cost of the asset is $6200.