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Discussion:New driveway 15 year property?

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Discussion Forum Index --> Basic Tax Questions --> New driveway 15 year property?


Discussion Forum Index --> Tax Questions --> New driveway 15 year property?

Kendrick (talk|edits) said:

23 March 2014
Landlord puts in a new $8000 driveway at his residential rental property.

It appears to me to be MACRS 15 year property, qualifying for 50% bonus depreciation.

Am I on the right track here?

Thanks for any help.

Ckenefick (talk|edits) said:

23 March 2014
Sure, have at it. A land improvement. But maybe it can just be expensed...

Ckenefick (talk|edits) said:

23 March 2014
But then again, maybe it's too close to the building, making it 27.5 year property?

Doug M (talk|edits) said:

23 March 2014
Or it is repaving the old driveway

Coddington (talk|edits) said:

23 March 2014
Assuming it is a capitalizable improvement and not a repair, driveways are usually 15-year land improvements. Typically you'll find a small expansion joint, usually covered, between the beginning of the driveway and the end of the building foundation.

Ckenefick (talk|edits) said:

23 March 2014
That expansion joint seems pretty important, Coddington...why did you make that comment?

Coddington (talk|edits) said:

23 March 2014
Sorry, thought it was self-evident in light of your earlier comment: If the driveway is integrated with the building foundation, (which I can't recall ever seeing), there probably wouldn't be an expansion joint. Not that expansion joints are always visible. Looking at my back porch, the expansion joint runs under the brick facade and is only visible in the doorway. Typically, in cost segregation examinations, the agents and the engineers will just accept most things outside the building footprint as 15-year land improvements. (I said most things, the primary exceptions being incoming/outgoing water and sewer, building electrical, and HVAC.) So I wouldn't be very worried about taking a residential driveway as 15-year unless you're talking about a house with a detached garage and a porte cochere and even then it depends on the facts and circumstances.

Kendrick (talk|edits) said:

24 March 2014
Ummm. I'm fine with the MACRS 15 year property. The bonus depreciation is what I want some confirmation on. I don't know, a slab of asphalt? Why not bonus depreciation? From what I can read, it should be eligible.

Anyone disagree?

Coddington (talk|edits) said:

24 March 2014
A newly constructed improvement with a recovery period of less than 20 years that was placed in service and originally used last year certainly appears to meet the requirements for bonus depreciation.

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